Ejiofor Alike with agency reports
Crude oil rose more than one per cent Monday on signs of inventory declines in the United States and news that Saudi Arabia will limit volumes of crude to some Asian buyers in July and deepen cuts to the United States.
Saudi Arabia, the worldâ€™s top oil exporter, will cut crude oil allocations to Asia in July to a total of about 300,000 barrels per day (bpd), deeper than in June, sources told Reuters.
Â One source said volumes to the United States would be cut by about 35 per cent in July.
Reuters reported that Brent crude oil yesterday futures rose 54 cents, or 1.1 per cent, at $48.69 a barrel, having hit a session high of $49.15.
.S West Texas Intermediate (WTI) crude futures gained 61 cents, or 1.3 per cent, to $46.44, having peaked at $46.71.
Prices plunged about five per cent last week after data from the US Department of Energy showed a surprise increase in stockpiles.
Some traders and analysts said the rise looked technical in nature, after WTI rallied and encouraged a similar move in the Brent market. But they said the move might prove fleeting.
Traders also noted the price rise came as data showed speculative traders had increased their investment in crude futures by taking on large volumes of long positions.
While financial traders have confidence in rising prices, the physical market remains under pressure, especially due to a rise in US drilling.
US drillers added eight oil rigs last week, bringing the total count to 741, the most since April 2015, energy services firm Baker Hughes Inc said at the weekend.
US output has risen by more than 10 percent since mid-2016, undermining OPEC-led pledges to cut almost 1.8 million bpd of production until the first quarter of 2018.