Oil rises after US inventories drop

Oil prices rose on Wednesday after Iraq and Algeria joined Saudi Arabia in supporting an extension to the Organization of the Petroleum Exporting Countries (OPEC) supply cuts and US crude inventories fell more than expected.
But the rise failed to recoup last week’s losses with concerns about rising output from the US, Libya and Nigeria continuing to weigh.
The American Petroleum Institute (API) reported a fall in US crude inventories by 5.8 million barrels last week, which was more than the 1.8 million-barrel slide analysts had predicted.
Global benchmark Brent crude was up 68 cents at $49.41 a barrel by 1327 GMT. US light crude oil was 69 cents higher at $46.57 a barrel.
“Oil prices are still finding it difficult to recoup the losses they suffered last week,” analysts at Commerzbank said in a note, adding the impact on prices from the fall in US inventories had been underwhelming.
Also supporting prices were comments from Algeria’s energy minister on Wednesday that Algeria and Iraq favor extending global supply cuts when OPEC meets later this month.
But questions remain about the effectiveness of OPEC-led cuts, with OPEC member Libya saying production now exceeded 800,000 barrels per day (bpd) for the first time since 2014 and could rise to 1.2 million bpd later this year.
Nigeria, which along with Libya is exempt from OPEC cuts, is also expected to see a jump in output soon as Shell tests the Trans Forcados oil export pipeline before it restarts.

Source: Arab News