Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.
At 0734 GMT, August WTI crude oil was trading at $73.02, up 0.07 or +0.10 per cent and September Brent crude oil is at $77.17, down $0.22 or -0.28 per cent. Brent, the global benchmark, rose 1.3% to $78.13. For the week ended on July 6, the total number of oil drilling rigs in the US increased by 5, or by 0.6 percent - to 863 units.
Crude oil prices went up on Monday during the Asian session due to the tight market after last week's USA crude oil reserves dropped to its lowest levels for more than three years.
Under pressure from Washington, Seoul has halted all orders of Iranian oil, according to sources, even as it braces from spillover effects from the U.S.
Although just 5 percent of China's overall crude imports, these supplies are worth $1 billion a month at current prices - a figure that seems certain to fall should a duty be implemented.
"If China retaliates with tariffs on USA crude, that could improve South Korea's terms of buying US crude.because the USA would need a market to sell to", said the KEEI's Lee. "I do expect that at least over the next few weeks, the Brent-WTI spread is going to narrow". USA crude CLc1 was down 25 cents at $73.55.
Although Saudi Arabia and Russian Federation have both said they would raise output to make up for these disruptions, FGE said "there simply is not enough capacity to make up for Iran's crude losses, plus Venezuela and Libya", and warned of the possibility of oil prices rising to $100 per barrel.
Chinese refiners were the top buyers of American crude oil in May, and have been regular importers since the U.S. revived domestic output and exports in recent years.
Investors are also focusing on how much exports from Saudi Arabia and other Gulf states will rise, Chauhan said.
US markets also garnered support from a government employment report showing better-than-expected growth in jobs. "U.S. sellers would have to find alternative buyers".
"We're seeing a bounce to the upside thanks to spillover from a really good jobs number and strength in equity markets, as well as a draw in Cushing stocks", said Jim Ritterbusch, president of Ritterbusch and Associates.
Oil prices dipped on Friday as markets grew more nervous ahead of a raft of import tariffs set to be imposed later in the day by the world's two biggest economies, the United States and China, threatening global growth.
Extra output is needed because oil demand has been rising fast this year and supply from several parts of the world, including Venezuela and Libya, has been falling.
Shares of top oil marketing companies led the gains on NSE index, as US-China trade war fears weighed on oil prices. United States producers continued to bring more rigs into oilfields already producing at record levels.
- Federer brings back the SABR at Wimbledon
- Loved-up Harry and Meghan shun royal protocol
- 'Ant-Man and the Wasp' Buzzes to No. 1
- Boullier resigns as McLaren boss, Hamilton looking to bounce back at Silverstone
- Iranian Dancing Videos Are Exploding Across the Internet
- Harry Kane Spurred On By England's World Cup Class Of '66
- Gal Gadot dresses as Wonder Woman to surprise kids at children's hospital
- Starbucks Announces Plans to Ban Single-Use Plastic Straws by 2020
- France forward Kylian Mbappe's meteoric rise like Lionel Messi - Nacer Chadli
- Dick Cheney Interview Teased for New Sacha Baron Cohen Show