UPDATE 3-Oil prices slip as U.S. rigs rise, demand growth falters
* U.S. oil rig count up for record 22nd week - Baker Hughes
* Libya, Nigeria production recovering, adding to excess
* Signs of slowing demand growth in Asia
* Market headed in right direction - Saudi energy minister
(Updates throughout, changes dateline SINGAPORE)
By Libby GeorgeLONDON, June 19 (Reuters) - Oil prices edged lower on
Monday, weighed down by an expansion in U.S. drilling that has
helped to maintain high global supplies despite an OPEC-led
initiative to tighten the market by cutting production.
Signs of faltering demand have also prompted weakening
sentiment, dropping prices to levels comparable to when the
output cuts were first announced late last year.
Brent crude futures <LCOc1> were down 16 cents at $47.21 per
barrel at 0841 GMT.
U.S. West Texas Intermediate (WTI) crude futures <CLc1> were
down 19 cents at $44.55 per barrel.
Prices for both benchmarks are down around 14 percent since
late May, when producers led by the Organization of the
Petroleum Exporting Countries extended a pledge to cut output by
1.8 million barrels per day (bpd) for an extra nine months.
Analysts said a steady rise in U.S. production, along with
output increases in cut-exempt Libya and Nigeria, were
undermining the OPEC-led effort.
"Anyone who is looking for the bottom of the current price
fall must keep his or her eyes on the supply-side equation and
only get optimistic if the factors that have been driving oil
prices lower since the end of May change," PVM analyst Tamas
Data on Friday showed a record 22nd consecutive week of
increases in the number of U.S. oil rigs, bringing the count to
747, the most since April 2015. [nL1N1JC0ZN]
Investment bank Goldman Sachs said if the rig count holds,
U.S. oil production would increase by 770,000 bpd between the
fourth quarter of last year and the same quarter this year in
the Permian, Eagle Ford, Bakken and Niobrara shale oilfields.
Supplies from OPEC also jumped in May, driven by recovering
output from Libya and Nigeria, which were exempt from cuts due
to unrest that had hindered their output.
There are also indicators that demand growth in Asia, the
world's biggest oil-consuming region, is stalling.
Japan's customs-cleared crude imports fell 13.5 percent in
May from a year earlier, the Finance Ministry said. [nENNH6G0SY]
India took in 4.2 percent less crude in May than it did a
year before. [nL3N1JD1P5]
In China, oil demand growth has been slowing for some time,
albeit from record levels. [nL3N1J51WN] [nL8N1HK050]
Saudi Energy Minister Khalid al-Falih said the oil market
needed time to rebalance, pointing to a draw of around 50
million barrels from floating storage and a drop in industrial
nations' onshore storage compared to July last year.
(Additional eporting by Henning Gloystein in Singapore; Editing
by Dale Hudson)
((Libby.George@thomsonreuters.com; +44 207 542 7714; Reuters
Keywords: GLOBAL OIL/ (UPDATE 3)