Energy

US crude rises 1.3%, settling at $46.34, after Saudis vow to cap oil exports

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Oil prices rose higher throughout Monday's session after leading OPEC producer Saudi Arabia pledged to cut exports in August to help reduce the global crude glut.

International benchmark Brent crude for September delivery rose 57 cents, or 1.2 percent, to $48.63 a barrel by 2:33 p.m. ET (1833 GMT), having risen from an earlier session low of $47.68.

U.S. West Texas Intermediate crude finished Monday's session 57 cents, or 1.3 percent, higher at $46.34.

Saudi Energy Minister Khalid al-Falih said his country would limit crude oil exports at 6.6 million barrels per day (bpd) in August, almost 1 million bpd below levels a year ago. Reports that the Saudis would slash their exports in August first surfaced last week.

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"This is the Saudis saying they view the current market conditions as too weak and they are actually delivering," SEB commodity strategist Bjarne Schieldrop said.

"It shows real additional willing on their part to do something, which is hugely important, rather than sitting back and letting OPEC motions roll forward. They're acting unilaterally and adding pressure."

The Russian Energy Minister Alexander Novak also told reporters that an additional 200,000 barrels per day of oil could be removed from the market if compliance with a global deal to cut output was 100 percent.

The Saudi and Russian energy ministers were in St Petersburg for a gathering of the Organization of the Petroleum Exporting Countries and some other producers. Ministers discussed their agreement to cut production 1.8 million bpd from January 2017 through March 2018.

Falih said OPEC and non-OPEC partners were committed to cut output longer if necessary but would demand that any non-compliant nations stick to the agreement.

There was no discussion of deeper output cuts, and OPEC Secretary-General Mohammad Barkindo said Nigeria has no intention of going beyond its production target of 1.8 million bpd.

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Nigeria's output reached 1.7 million bpd in June, according to independent sources cited by OPEC in a monthly report.

Nigeria and Libya have been exempt from the cuts to help their industries recover from years of unrest. Libya's oil production has reached 1.069 million barrels per day (bpd), a Libyan oil source told Reuters, which is above a high reached earlier this month.

In the United States, rig counts were up to 764 in latest week from 371 rigs a year ago.

The executive chairman of energy services company Halliburton said he expected the U.S. rig count to rise above 1,000 by year end, but that about 800-900 rigs was more sustainable in the medium term.

"Today, rig count growth is showing signs of plateauing, and customers are tapping the brakes," said Dave Lesar. "This tapping of the brakes is happening all over the place in North America."

Still, oil prices remain choppy and under pressure, said Tony Headrick, energy market analyst at CHS Hedging LLC in Inver Grove Heights, Minnesota.

"The upside is limited because as we move towards $50 that gives U.S. producers an incentive to hedge for future production," he said.

— CNBC's Tom DiChristopher contributed to this report.