Oil Advances to $47 As Saudis Commit to Export Cuts

With news Monday that Saudi Arabia promised deep cuts to crude exports next month, oil extended gains to $47 a barrel.

Futures in New York added as much as 1.6 percent after rising 1.3 percent Monday. Saudi Arabia will limit shipments at 6.6 million barrels a day in August, 1 million lower than a year earlier, said Energy and Industry Minister Khalid Al-Falih.

Oil remains in a bear market amid concern rising global production will offset supply cuts by OPEC and its allies. While the Saudi comments at talks with oil producers in St. Petersburg, Russia, on Monday helped lift prices, the same meeting agreed to let Nigeria and Libya continue boosting production, slowing the market rebalancing.

“Yesterday’s Saudi decision to cut exports still lingers in the market,” said Bjarne Schieldrop, chief analyst for commodities at SEB Markets. The headlines that the U.S. shale oil boom is easing are also driving futures higher, he said.

West Texas Intermediate for September delivery gained as much as 73 cents to $47.07 a barrel on the New York Mercantile Exchange as of 7:11 a.m. local time. Total volume traded was about 4 percent below the 100-day average. Today's increase comes on the heels of prices rising 57 cents to $46.34 on Monday.