On August 3, oil prices rose following strong demand in the United States but high supplies from the Organization of Petroleum Exporting Countries (OPEC) pared gains.
According to Reuters, Benchmark Brent crude was up 20 cents a barrel at $52.56 by 0920 GMT. US light crude was 20 cents higher at $49.79.
The US Energy Information Administration (EIA) reported a 1.5 million barrel drop to 481.9 million barrels in crude inventories last week. EIA also reported record gasoline demand of 9.84 million barrels per day.
However, high OPEC production is capping prices. The oil cartel and other producers including Russia have promised to restrict output by 1.8 million barrels per day until March 2018 to help support prices and draw down inventories. But a Reuters survey showed this week OPEC output hit a 2017 high of 33 million barrels per day in July, up 90,000 barrels per day from the previous month, a Reuters survey showed.
Extra oil comes primarily from Libya, as it is exempt from the cuts because conflict had curbed its production. Nigeria, which is also exempt from the cuts, has also increased output, raising concerns among other OPEC members.
The oil cartel is expected to hold a meeting next week to review members’ compliance to the output cuts.