Oil gains after weekly loss as Libya may be asked to cap output

Hong Kong - Oil rebounded after a weekly loss as Kuwait said Libya and Nigeria may be asked to cap supply to help rebalance the market.

Futures climbed as much as 1.1 % in New York after declining 3.9 % last week. The African producers, exempt from the Opec-led agreement to cut output, have been invited to a July 24 meeting to discuss the stability of their production, Kuwait’s Oil Minister Issam Almarzooq said in Istanbul.

US crude drillers increased the rig count by 7 to 763, Baker Hughes said on Friday.

Oil in New York and London remain in a bear market amid concern rising global supply will offset curbs by the Organisation of Petroleum Exporting Countries (Opec) and its partners including Russia.

It is premature to talk about deeper output cuts, Opec Secretary-General Mohammad Barkindo said in Istanbul.

"There’s a long way to go before talk about Libya and Nigeria limiting output gets translated into positive action, but there is logic to the proposal given they have made substantial increases," said Ric Spooner, an analyst at CMC Markets in Sydney.

"Prices are unlikely to be too volatile in the coming weeks and range between the low $40s and high $40s."

West Texas Intermediate for August delivery added as much as 49 cents to $44.72 a barrel on the New York Mercantile Exchange, and was at $44.58 at 12:40 in Hong Kong. Total volume traded was about 3 % below the 100-day average. Prices lost $1.29, or 2.8 %, to $44.23 on Friday.

Brent for September settlement rose 36 cents, or 0.8 %, to $47.07 a barrel on the London-based ICE Futures Europe exchange. Prices slid 2.5 % last week. The global benchmark crude traded at a premium of $2.32 to September WTI.

Deepening production cuts is not on the agenda for the July 24 meeting in St. Petersburg, Russia, said Kuwait’s Almarzooq, who is chairman of the committee monitoring compliance to the curbs. If Libya and Nigeria are able to stabilize their output at current levels, they will be asked to cap supply as soon as possible, he said.

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