Oil prices fall nearly 2% after end-of-week rally

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Oil prices fall nearly 2% after end-of-week rally

The API data also showed that inventories of distillates rose almost 2.1 million barrels, sources said.

There are indications that United States output may soon slow, as energy companies cut rigs drilling for new oil for a second week in three, energy services firm Baker Hughes said on Friday.

OPEC and 10 producers outside the cartel, including Russian Federation, first agreed late past year to cap production at around 1.8 million barrels a day lower than peak October 16 levels, with the aim of reining in the global oil glut and sending prices higher.

USA supply continues to grow, as well, EIA data showed.

Download the Nigeria Today app from Play store. The oil market most likely will have to prepare for another big drop in USA crude supply that will come after the September contract is history.

Refinery runs last week averaged 17.5 million barrels of crude, compared with 17.6 million bpd a week earlier, when gasoline output fell to 10 million bpd.

Late Tuesday the American Petroleum Institute reported a 3.6 million barrel drop but saw a 1.4 million barrel increase in gasoline stockpiles.

According to sources Libya will only accept to sign an output limit agreement with other OPEC-affiliated producers once its daily production levels reaches a target of 1.25 million barrels and is certain the level can be maintained. The official data from the Energy Information Administration is due out Wednesday.

Also helping push prices higher were unconfirmed reports that one of America's biggest oil refineries (owned by Exxon in Texas) had been forced to close part of a major production unit.

US crude production, which has been growing steadily, rose 26,000 bpd to 9.53 million bpd.

However, so far, the deal has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, as well as a relentless increase in US shale output. USA exports, which fluctuate on a weekly basis, rose to 936,000 bpd from 877,00 bpd the previous week.

Oil prices found extra support from news that Libya's Sharara oilfield, the country's largest, shut on Tuesday just hours after reopening following a three-day pipeline blockade.

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