Oil inches higher but glut concerns hang over market

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    Investing.com - Oil prices edged higher in European trade on Tuesday, but gains were limited as the market weighed ongoing efforts by major producers to cut output and reduce a global glut against a relentless increase in U.S. drilling activity.

    The U.S. West Texas Intermediate crude August contract was at $44.59 a barrel by 3:15AM ET (0715GMT), up 15 cents, or around 0.4%. The U.S. benchmark fell to its lowest since May 5 at $44.26 in the prior session.

    Elsewhere, Brent oil for August delivery on the ICE Futures Exchange in London tacked on 19 cents to $47.10 a barrel.

    Oil prices lost around 1% on Monday as concerns over a steady increase in U.S. production added to fears over a glut in the market.

    U.S. drillers last week added rigs for the 22nd week in a row, according to data from energy services company Baker Hughes, implying that further gains in domestic production are ahead.

    The increase in U.S. drilling activity and shale production has mostly offset efforts by OPEC and other producers to cut output in a move to prop up the market.

    Last month, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.

    Investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products.

    Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2030GMT) later on Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 2.2 million barrels.

    Elsewhere on Nymex, gasoline futures for July was little changed at $1.452 a gallon, while July heating oil added half a cent to $1.415 a gallon.

    Natural gas futures for July delivery ticked up 0.7 cents to $2.901 per million British thermal units.

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