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Hong Kong - Oil traded below $46 a barrel before an Organisation of Petroleum Exporting Countries (Opec) and committee meets to discuss the progress of supply cuts enacted to drain a global glut.
Futures were little changed in New York after declining 1.7% last week. Limiting output from Nigeria and Libya, which are exempt from the curbs, won’t be on the agenda when Opec and its partners meet on Monday in St. Petersburg, according to people familiar with planned talks.
In the US, drillers targeting crude reduced the rig count by one, according to Baker Hughes.
Oil remains in a bear market amid concern rising global output will offset curbs by members of Opec and its allies including Russia.
The group is likely to become less compliant toward the end of this year, with the risk of a domino effect after some members suggested they won’t adhere to their targets, according to JPMorgan Chase.
"Nigeria and Libya have been the major source of increased global supply in recent months," said Ric Spooner, an analyst at CMC Markets in Sydney. "They have been able to restore their production faster than most had thought.
The market has been quite volatile recently but the downside to prices is probably fairly limited from here."
West Texas Intermediate for September delivery was at $45.78 a barrel on the New York Mercantile Exchange, up 1 cent, at 1:19pm in Hong Kong. Total volume traded was about 7% below the 100-day average.
Brent for September settlement was 5 cents higher at $48.11 a barrel on the London-based ICE Futures Europe exchange. Prices lost 1.7% last week. The global benchmark crude traded at a premium of $2.33 to WTI.
Libya, which has increased output above 1 million barrels a day, isn’t planning to cap production until it reaches its target of 1.25 million a day by December, according to people familiar.
Producers including Saudi Arabia and Russia are gathering in St. Petersburg to assess the effectiveness of the supply deal.
Oil-market news:
Market rebalancing is on track and is set to accelerate in the second half of the year, Opec Secretary-General Mohammad Barkindo said. US drillers trimmed the rig count by 1 to 764, the first drop in three weeks, according to Baker Hughes data on Friday.
Nigeria signalled earlier this month that it would cap production when it can stably pump 1.8 million barrels a day.
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