Investing.com - Crude gained in Asia on Friday ahead of weekly U.S. rig count figures that will set the near-term tone, though tension on the Korean peninsula and the ability of OPEC and allies to keep output cuts on track retain center stage.
On the New York Mercantile Exchange crude futures for September delivery rose 0.14% to $48.66 a barrel, while on London's Intercontinental Exchange, Brent rose 0.13% to $51.94 a barrel.
Overnight, crude futures settled lower on Thursday, as market participants questioned Opec’s commitment to the global pact to curb production in the wake of a report showing crude output among the group’s members rose in July.
In a monthly report Thursday, the Organization of the Petroleum Exporting Countries raised its outlook for oil demand this year by 100,000 barrels a day, saying it now expects growth of 1.37 million barrels a day in 2017.
The cartel also said, however, that production from the group rose further in July, as exempt producers – Nigeria and Libya – and top exporter Saudi Arabia increased output.
This Opec report stoked fears that Opec and its allies’ may not be able to stem the glut in supplies by only curbing production, offsetting optimism from the prior session, when crude prices snapped a two-day losing streak, following bullish U.S. inventory data.
Inventories of U.S. crude fell by roughly 6.5m barrels in the week ended Aug 4, confounding expectations of a draw of about only 2.5m barrels, the Energy Information Administration reported Wednesday. It was the sixth-straight weekly decline.
The uptick in Opec production comes a few days after the group met in Abu-Dhabi to address concerns of falling compliance. The outcome of the meeting, however, failed to lift sentiment as the group offered little in the way of tangible solutions to increase compliance.
The meeting “proved fruitful and “will help facilitate full conformity with the Declaration of Cooperation, which participating countries remain steadfast in their commitment to fulfil.” Opec noted in a statement on its website.