UPDATE 2-Oil prices hold near 7-mth lows, glut keeps dragging
* OPEC supply jumped in May as Libya, Nigeria output
* Analysts say rising U.S. production has fed global glut
* Saudi minister confident OPEC supply cuts are working
By Aaron SheldrickTOKYO, June 20 (Reuters) - Oil markets held around
seven-month lows on Tuesday as investors focused on persistent
signs of rising supply that are undermining attempts by OPEC and
other producers to support prices.
Brent <LCOc1> futures were up 2 cents at $46.93 at 0611 GMT.
On Monday, they fell 46 cents, or 1 percent, to settle at $46.91
That was their lowest close since Nov. 29, the day before
the Organization of the Petroleum Exporting Countries (OPEC) and
other producers agreed to cut output for six months from
U.S. West Texas Intermediate crude <CLc1> futures were down
3 cents at $44.17 a barrel. They declined 54 cents, or 1.2
percent in the previous session, to settle at $44.20 per barrel,
the lowest close since Nov. 14. The July contract will expire on
Tuesday and August will become the front-month.
Both benchmarks are down around 15 percent since late May,
when OPEC, Russia and other producers extended by nine months
the cut in output by 1.8 million barrels per day (bpd).
"Recent data points are not encouraging," Morgan Stanley
said in a research note. "Identifiable oil inventories - both
crude and product in the OECD, China and selected other non-OECD
countries - increased at a rate of (about) 1 (million bpd) in
OPEC supplies jumped in May as output recovered in Libya and
Nigeria, two countries exempt from the production cut agreement.
Libya's oil production has risen more than 50,000 bpd after
the state oil company settled a dispute with Germany'sWintershall, a Libyan source told Reuters. [nL8N1JG287]
Analysts said rising U.S. crude production has fed the
global glut. Data on Friday showed a record 22nd consecutive
week of increases in U.S. oil rig numbers.
Still, Saudi Energy Minister Khalid al-Falih remained
confident OPEC's cuts were working. The oil market is heading in
the right direction but still needs time to rebalance, al-Falih
told the London-based newspaper Asharq al-Awsat.
"In my opinion, market fundamentals are going in the right
direction, but in light of the large surplus in stockpiles over
the past years, the cut needs time to take effect."
GRAPHIC: Brent oil may bottom out around $46.20 http://tmsnrt.rs/2tm5Z62
GRAPHIC: U.S. oil neutral in $44.10-$44.55 range http://tmsnrt.rs/2rPhW2f
(Reporting by Aaron Sheldrick; Editing by Joseph Radford and
((email@example.com; 81-3-6441-1320; Reuters
Keywords: GLOBAL OIL/ (UPDATE 2)