Oil prices edge up on Saudi Arabia's promise to cut crude exports to the US

Courtney Goldsmith
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Oil prices have edged up today (Source: Getty)

Oil prices have lifted slightly as Saudi Arabia plans to cut crude exports to the US next month.

After briefly slipping below $50 a barrel earlier this week, global benchmark Brent crude was trading up 0.61 per cent at $50.87 a barrel this morning. West Texas Intermediate was up 0.71 per cent at $48.04 a barrel.

Gains came as a Saudi energy ministry official told Reuters the country's crude exports to the US would fall by around 300,000 barrels per day (bpd) between February and March.

This will be a significant cut to the 1.3m bpd the US imported from Saudi suppliers in February, according to the US Energy Information Administration.

The rise of shale drilling in the US has threatened the Organisation of the Petroleum Exporting Countries' (Opec) efforts to prop up prices by cutting output by 1.8m bpd in the first half of the year.

Shale drilling has pushed up US oil production by more than eight per cent since mid-2016 to above 9.1m bpd.

Read more: Saudi Arabia has surrendered control of the global oil market to US shale

However, despite the fact US shale producers are drilling at the highest rate in 18 months, research by Reuters shows they have left a record number of wells unfinished.

Investors use rig count data as a leading indicator for output, but the new data shows US output is rising as sharply as drilling suggests.

The growing number of unfinished wells means investors, traders and oil market players may need to reinterpret rig count data.

Read more: Will shale be the game-changer for the UK it's been for the US?

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