Crude holds gians in Asia on upet views on output cuts, inventories - Sean Seshadri

Crude held gains in to Asia on Wednesday with markets getting a burst of upbeat news on global supply cuts and inventories.

On the New York Mercantile Exchange crude futures for August delivery were quoted at $48.85, up 1.17%, while on London\'s Intercontinental Exchange, Brent was cited at $50.77 a barrel.

U.S. oil stocks dropped a sharp 10.23 million barrels at the end of last week, the American Petroleum Institute estimated on Tuesday, with the figure far exceeding an expected 3.0 million barrels decline.

Gasoline supplies rose 1.9 million barrels following a large draw of 5.45 million barrels the previous week and compared with expectations of a draw. Distillate registered a draw of 0.11 million barrels after the draw of 2.9 million barrels previously.

Stocks at the oil storage hub of Cushing, Oklahoma, registered a substantial draw of 2.57 million barrels the 15th weekly draw out of the last 16 weeks. On Wednesday, the Energy Information Administration is due to release official data.

Overnight, crude futures settled higher on Tuesday, as investors continued to cheer Saudi Arabia’s pledge to lower crude exports and Opec’s commitment to boost compliance with output cuts to curb excess supplies.

At a gathering of ministers from major crude-producing nations in St. Petersburg, Russia on Monday, 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.

The Saudi energy minster added that the production-cut agreement could be extended beyond March if necessary but any further extension would rely on non-compliant nations adhering to the agreement.

Opec’s compliance rate – with the deal to curb production –fell to 78% June, the IEA said in its report earlier this month.

Russian Energy Minister Alexander Novak said an additional 200,000 bpd of oil could be removed from the market if there is 100% compliance with the OPEC-led deal.

Despite the somewhat positive outcome of the meeting, Opec has its work cut out to curb excess supplies and lower crude stockpiles to the five-year average, which is the target level for Opec and non-Opec members.

Opec said that stocks held by industrial nations had fallen by 90 million barrels in the first six months of the year but were still 250 million barrels above the five-year average.

Gold flat as dollar off 13-month lows - Sean Seshadri

Gold prices remained roughly unchanged on Monday, as investors mulled over mostly upbeat economic data ahead of the Federal Reserve’s policy meeting later this week while continued U.S. political uncertainty limited downside momentum.

Gold futures for August delivery on the Comex division of the New York Mercantile Exchange fell by $0.45, or 0.04%, to $1,254.47 a troy ounce.

Gold prices pulled back from highs on Monday, amid an uptick in the greenback, following upbeat economic reports easing investor concerns about a slowdown in the U.S. economy.

On Monday, Markit's manufacturing and services flash surveys both showed the U.S. beating expectations.

In a separate report, the National Association of Realtors said Monday, sales of second-hand homes slid in June to the lowest level since February as tight supply and high prices weighed on housing activity despite strong demand.

Sales of previously-owned homes fell 1.8% in June from the previous month, to an annualized pace of 5.52m units.

U.S. political uncertainty also added a measure of support for the precious metal, as President Donald Trump's son-in-law and senior advisor Jared Kusher, in his testimony to the Senate Intelligence Committee, said neither that he nor anyone in the Trump campaign team colluded with Russian officials over the US election.

Dollar-denominated assets such as gold are sensitive to moves in the dollar – A rise in the dollar makes gold more expensive for holders of foreign currency and thus, decreases demand.

The trio of economic reports come ahead of the Federal Reserve’s policy meeting slated for Wednesday, with the majority of analysts expecting the Fed to keep its benchmark rate unchanged.

In other precious metals, silver futures fell 0.18% to $16.428 a troy ounce while platinum futures lost 0.56% to $932.12.

Copper traded at $2.738, up 0.57%, while natural gas, fell by 2.80% to $2.881.

Sean Seshadri - Crude futures settle higher as Saudi oil chief pledges export cuts

Crude futures settled higher on Monday, after Opec producer Saudi Arabia pledged to lower crude exports in August while Nigeria agreed to curb production.

On the New York Mercantile Exchange crude futures for August delivery rose 1.3% to settle at $46.34 a barrel, while on London's Intercontinental Exchange, Brent added 1.21% to trade at $48.64 a barrel.

At a gathering of ministers from major crude-producing nations in St. Petersburg, Russia on Monday, 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.

The Saudi energy minster added that the production-cut agreement could be extended beyond March if necessary but any further extension would rely on non-compliant nations adhering to the agreement.

Also adding to positive sentiment on oil, were reports suggesting that Nigeria committed to take part in production if it reaches a production level of 1.8m bpd.

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

Some analysts praised Nigeria decision to agree to cap production but expressed concerns about Opec’s compliance rate – with the deal to curb production – which fell to 78% June, the IEA said in its report earlier this month.

“The only significant thing about the meeting is that Nigeria has voluntarily agreed that they will not increase their production above 1.8 [million barrels a day] once they have achieved that level,” said Naeem Aslam, chief market analyst at ThinkMarkets U.K.

But when it comes to the “compliance side of things,” that’s getting “really ugly,” he said. “A lot of cheating is already happening and we are only half [way] through this agreement,”

In May, Opec and non-Opec members agreed to extend production cuts of 1.8m bpd for a period of nine months until March but rising production from the U.S., Nigeria and Libya has undermined the cartel’s efforts to curb excess supply.

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Sean Seshadri - U.S. on track to be world's No.2 LNG exporter by end-2022: IEA

 The United States is on track to have capacity to become the world's second largest exporter of liquefied natural gas (LNG) by the end of 2022, just behind Australia and ahead of Qatar, the International Energy Agency (IEA) said.

Overall, global LNG export capacity would reach 650 billion cubic meters (bcm) a year by the end of 2022, compared to less than 452 bcm a year in 2016, the IEA said in its annual report on gas markets.

Of that amount, Australia would have capacity to export 117.8 bcm a year of LNG, followed by the United States with 106.7 bcm a year and Qatar with 104.9 bcm a year, it said.

Australia would stay top by adding 30 bcm a year of capacity by the end of 2022 to its existing capacity, but the United States, which has seen shale gas output surge, would add about 90 bcm a year to its capacity of about 14 bcm a year now.

"By the end of our forecast period, the United States will be well on course to challenging Australia and Qatar for global leadership among LNG exporters," the report said.

However, the new LNG capacity is being added to an already well-supplied market, while demand is falling in some of the traditionally large importing nations, such as Japan, it said.

With demand expected to reach 460 bcm a year by 2022, the market would have 190 bcm a year in excess capacity, putting pressure on gas prices and discouraging new upstream investment.

Current low LNG prices are already making it tougher for exporters, and competition is loosening the typically rigid contracts that have dominated the long-distance trade.

"This change will be further accelerated by the expansion of U.S. exports, which are not tied to any particular destination and so will play a major role in increasing the liquidity and flexibility of LNG trade," the IEA said.

Qatar said last week it planned to raise its LNG output by 30 percent to 100 million tonnes a year (roughly 140 bcm a year) in the next five to seven years, in what was seen as a challenge to other exporters.

The IEA report did not assess the impact of Qatar's plans as the extra capacity was expected to be in place after the report's forecast period of 2016-2022, Keisuke Sadamori, the IEA's director of energy markets and security, told reporters.

Overall, the IEA said global gas production would grow faster than oil and coal in the next five years, helped by low price and ample supply, alongside a growing preference for gas because of its lower emissions compared to other fossil fuels.

Global gas demand was expected to rise by 1.6 percent a year to 4,000 bcm in 2022, slightly higher than last year's forecast of 1.5 percent, the IEA said. Most of the expected growth was expected to come from developing countries, led by China.

Most gas is transported by pipeline rather than on ships as LNG.

The United States, the world's largest gas producer, would increase output more than any other country in the next five years, the IEA. By 2022, U.S. production was expected to be 890 bcm, accounting for 22 percent of the total global gas output.

Sean Seshadri - Gold continues slow climb

Gold climbed in Asia on Wedneday, continuing a recovery from multi-month lows last week.

Gold futures for August delivery edged up 0.37% to $1,219.23 as of mid-morning.

Gold has been rebounding this week after stronger than expected economic data out of the U.S., a subdued inflation picture in China and a narrower than expected current account surplus in Japan. A strengthening in other commodity prices like oil and iron have also helped while political uncertainty in the U.S. has taken some of the shine off the US dollar.

Gold and the dollar typically move in opposite directions, which means if the dollar goes down, gold futures, which are denominated in the U.S. currency, will rise. The U.S. dollar index, which measures the greenbackís strength against a trade-weighted basket of six major currencies, was down 0.11% to 95.38 as of mid-morning. The gold U.S. dollar index was up 0.19% to 1,219.70.

On Monday, China reported that the Consumer Price Index rose 1.5% year-on-year in June and the Producer Price Index rose 5.5%.

Earlier, Japan reported its unadjusted current account surplus at •1.654 trillion, narrower than the •1.796 trillion expected, while core machinery orders fell 3.6% on year in May, compared to a gain of 7.7% seen. USD/JPY changed hands at 113.98, up 0.06%.

Investors are now looking forward to US Federal Reserve Chair Janet Yellen's testimony on monetary policy as well as U.S. data on inflation and retail sales, due out on Friday. Trade data from China on Thursday should also give markets some direction.

The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has raised doubts over whether officials will be able to stick to their planned tightening path. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar.

Last week, gold prices dropped to almost four-month lows on Friday.

The U.S. economy added 222,000 jobs last month the Labor Department reported, more than the 179,000 new jobs expected by economists.

Sean Seshadri - Gold prices give up Monday gains in Asia, Tokyo stands out

Gold prices generally lost ground in Asia on Tuesday, giving up some gains from Monday, with Tokyo gold standing out as the sole gainer.

Gold futures for August delivery edged down 0.13% to $1,211.60%, giving up some gains from the day before. In Tokyo, the June 2018 contract gained 0.23% to JPY4,442 ($38.91) a gram.

In the week ahead, investors will focus on Fed Chair Janet Yellen's testimony on monetary policy as well as U.S. data on inflation and retail sales, due out on Friday, and trade data from China on Thursday. A hawkish outlook from the Fed could send gold further down to test multi-month lows.

The U.S. dollar index, which measures the greenbackís strength against a trade-weighted basket of six major currencies, was up 0.08% to 96.10. The gold U.S. dollar index was down 0.17% to 1,212.26

Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures, which are denominated in the U.S. currency, will drop.

Last week, gold prices dropped to almost four-month lows on Friday after a stronger-than-forecast U.S. jobs report boosted the dollar against a basket of the other major currencies. The U.S. economy added 222,000 jobs last month the Labor Department reported, more than the 179,000 new jobs expected by economists. The rapid pace of jobs growth reassured investors that the economy is on a strong enough footing to justify the Federal Reserve's plans to raise interest rates once more this year.

The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has raised doubts over whether officials will be able to stick to their planned tightening path.

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar.

Crude up in Asia as Qatar faces deadline on Gulf demands - Sean Seshadri

Crude gained in Asia on Monday as Qatar faced a deadline on 13 demands by Gulf countries to end alleged support for terrorism and shut Doha-based Al Jazzera, with the emirate expected to reject the calls this week.

The U.S. West Texas Intermediate crude August contract rose 0.41% to $46.23 a barrel On the ICE Futures Exchange in London, Brent oil for September delivery was last quoted at $48.87 a barrel.

Last week, oil prices extended gains into a seventh session on Friday to log their biggest weekly gain since mid-May, as investors were encouraged by fresh signals of a decline in U.S. crude production.

Energy services company Baker Hughes reported on Friday that the number of active U.S. rigs drilling for oil declined by two to 756 rigs at the end of last week.

That marked only the second time the weekly oil-rig count fell this year. Oil-rig numbers had climbed for 23 weeks in a row.

The report came after U.S. government data revealed that total domestic crude production fell by 100,000 barrels a day to 9.25 million barrels for the week ended June 23. That was the biggest decline in weekly output since July 2016.

Crude reached bear-market territory late last month amid concern that the ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance the market.

In May, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.

So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, and a relentless increase in U.S. shale oil output.

In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Wednesday and Thursday to gauge the strength of demand in the world’s largest oil consumer.

The reports come out one day later than usual due to the U.S. Independence Day holiday on Tuesday.

Meanwhile, traders will also continue to pay close attention to comments from global oil producers for evidence that they are complying with their agreement to reduce output this year.

U.S. slaps dumping duties on Canadian wood, Ottawa vows to fight - Sean Seshadri

Escalating a trade dispute with Canada in the run-up to talks on renegotiating NAFTA, the U.S. Commerce Department on Monday imposed preliminary anti-dumping duties on Canadian softwood lumber of up to 7.72 percent.

When combined with preliminary anti-subsidy duties issued in April, the new measures will bring total duties on Canadian lumber to between 17.41 percent and 30.88 percent.

The announcement, which was largely expected, prompted an angry reaction from the Canadian government against what it called unfair and punitive duties.

"We will vigorously defend Canada's softwood lumber industry, including through litigation," the government said in a statement.

The bilateral dispute is the fifth over lumber in less than 40 years.

U.S. producers asked the Commerce Department last November to investigate what they viewed as unfair subsidies to Canadian competitors, many of whom procure their timber from government lands at cheaper rates.

U.S. lumber producers generally cut timber grown on private land. Canada, which denies it subsidizes producers, said earlier this month it would give C$867 million ($654 million) in aid to the domestic industry.

Earlier on Monday, the Commerce Department said it made a preliminary decision to exclude Newfoundland and Labrador, Nova Scotia and Prince Edward Island from its investigation into whether Canada is dumping or unfairly subsidizing softwood lumber.

Until the decision is confirmed, U.S. Commerce Secretary Wilbur Ross said the duties would still be collected on lumber from the three provinces. The exclusion does not include New Brunswick, an Atlantic province bordering Maine that is also a major producer of softwood lumber.

The U.S. anti-subsidy and anti-dumping probes affect about $5.66 billion worth of imports of the construction material, and they show the United States taking a tough stance on trade with Canada as the two countries and Mexico prepare to renegotiate the 23-year-old North American Free Trade Agreement.

Much of the wood in the excluded Canadian provinces is also harvested from private land, and the three provinces had argued they operate under more of a free-market model.

Commerce said it is scheduled to announce a final decision on the anti-dumping duties on Sept. 7. Its preliminary duties were 7.72 percent for Canfor Corp and related firms, 4.59 percent for Resolute FP Canada, 7.53 percent for Tolko Industries, 6.76 percent for West Fraser Mills and 6.87 percent for all others.

NAFTA talks are expected to begin around Aug. 16.

Crude gains in Asia with weekly U.S. rig count the next data point - Sean Seshadri

Crude prices gained in Asia on Friday with the market looking ahead to U.S. rig count figures.

On the New York Mercantile Exchange crude futures for August delivery rose 0.23% to $42.84 a barrel, while on London's Intercontinental Exchange, Brent gained 0.18% to $45.30 a barrel.

The number of rigs drilling for oil in the U.S. has increased for 22 straight weeks with the latest figures due on Friday from oilfield services firm Baker Hughes with investors waiting to see if recent price drops in crude are causing a re-think on drilling plans.

Tropical storm Cindy made landfall on Thursday near Lake Charles, Louisiana, after it disrupted some operations in the Gulf of Mexico, home to about 17% of U.S. crude and 5% of dry natural gas output. The storm is now on the wane.

Overnight, crude futures settled higher on Thursday, paring some of the losses sustained in recent sessions but sentiment remained bearish as investors continue to fret about rising global stockpiles.

Crude futures snapped a three-day losing streak, despite a growing number of analysts scaling back their forecast for crude prices over the near-term amid fears that the glut in crude stockpiles would persist.

The move higher in crude futures comes a day after the Energy Information Administration said that crude stockpiles fell by roughly 2.45m barrels in the week ended June 16, above expectations of draw of about 2.1m barrels.

Despite the draw in U.S. crude stockpiles, rising shale output remains a principal concern among investors – The U.S. Department of Energy recently estimated that supply will grow by 122,000 barrels a day.

Since the turn of the year oil prices have slumped more than 20%, reflecting negative investor sentiment on oil, as doubts continued to mount as to whether OPEC and its allies can tackle the glut in supply.

In May, OPEC and non-OPEC members agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.8 million bpd agreed in November last year.

FOREX-Dollar advance stalls as oil slides, pound struggles near 2-month low - Sean Seshadri

Dollar index edges away from 1-month highs

* Crude oil tumble depresses US yields, weighs on dollar

* Loonie, Norwegian crown also pressured by weaker oil

* Pound slides to 2-mth low with higher rate hopes doused (Adds details and quotes, updates prices)

By Shinichi Saoshiro

TOKYO, June 21 (Reuters) - The dollar pulled back from one-month highs against a basket of currencies on Wednesday as tumbling oil prices pushed down U.S. yields, while the pound wobbled after Bank of England Governor Mark Carney shot down hopes of an interest rate hike.

The dollar index against a group of major currencies was 0.05 percent lower at 97.699 .DXY .

It had hit a one-month high of 97.871 on Tuesday as expectations that the U.S. Federal Reserve, which hiked interest rates last week, would tighten policy again in 2017.

The greenback's advance, however, stalled as the dollar-supportive bounce in U.S. Treasury yields was cut short overnight.

Following a big drop in oil prices, the 10-year Treasury note yield US10YT=RR fell sharply on Tuesday, reversing a large portion of the gains it made after the Fed left the door open for another rate increase this year.

"Lower crude prices weaken inflationary pressures and in turn arrest the rise in U.S. yields," said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

"U.S. inflation indicators have not been strong to start with. Now that oil is falling, it could add further pressure to the dollar by weakening sentiment towards the U.S. energy sector."

The euro was steady at $1.1137 EUR= after retreating to a three-week low of $1.1119 overnight.

The dollar was down 0.2 percent at 111.220 yen JPY= , off a near one-month peak of 111.790 touched on Tuesday.

While the U.S. currency's advance may have stopped, some expected the losses to be limited, with the dollar seen eventually resuming its move higher.

"Sentiment towards the dollar may not be great, but participants don't have strong motivation to buy the yen or euro either given the low-yield policies of the Bank of Japan and the European Central Bank," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.

"And with Wall Street shares holding near record highs and the Fed seemingly intent on increasing rates, the market would not be in a hurry pass negative judgement on the dollar."

The pound was little changed at $1.2630 GBP=D3 . The currency had slid 0.9 percent overnight and plumbed a two-month trough of $1.2603.

Sterling wobbled near two-month lows after BoE's Carney said on Tuesday that now was not the time to raise UK interest rates. Last week three out of eight BoE policymakers voted in favour of a rate hike and raised hopes for a near-term tightening. GBP/

Commodity-linked currencies were also on the back foot after U.S. crude oil prices slumped to nine-month lows overnight on global oversupply fears. O/R

The Norwegian crown NOK= languished near a five-week low against the dollar after falling about 0.5 percent on Tuesday.

The Canadian dollar, which fell about 0.35 percent overnight, extended losses to trade at C$1.3277 per dollar CAD=D4 .

The loonie moved further away from a 3-1/2-month high of C$1.3165 reached a week ago after Bank of Canada's governor expressed support for an interest rate hike.

The Australian dollar edged down 0.1 percent to $0.7574 AUD=D4 and the New Zealand dollar was 0.2 percent lower at $0.7228 NZD=D4 .

Brent crude LCOc1 tumbled to seven-month lows on Tuesday as increased supply from several key producers overshadowed high compliance to an output cut deal among OPEC and non-OPEC oil producers.

Gold / Silver / Copper futures - weekly outlook: June 19 - 23 - Sean Seshadri

Gold prices ended a bit higher on Friday, but the yellow metal still logged its second straight weekly loss after the Federal Reserve hiked rates and maintained plans to go ahead with another increase by year-end.

Gold for August delivery inched up $1.90, or about 0.2%, to close at $1,256.50 a troy ounce on the Comex division of the New York Mercantile Exchange. It touched its lowest since May 24 at $1,252.70 on Thursday.

For the week, the precious metal lost $13.20, or roughly 1.2%, the second weekly loss in a row.

Also on the Comex, silver futures dipped 5.5 cents, or around 0.3%, to settle at $16.66 a troy ounce, the lowest level since May 19. The white metal declined 3.3% for the week.

The Fed raised interest rates as widely expected on Wednesday and maintained plans to go ahead with another rate hike by year-end. The central bank also provided greater detail about how it plans to reduce its massive $4.5 trillion balance sheet.

Despite the Fed's relatively hawkish message, market players remained doubtful over the Fed's ability to raise rates as much as it would like before the end of the year due to a recent run of disappointing U.S. economic data.

U.S. homebuilding fell for a third straight month in May to the lowest level in eight months, data showed on Friday, suggesting that subdued housing activity could dent economic growth in the second quarter.

In a separate report the University of Michigan said its consumer sentiment gauged fell to 94.5 in early June from 91.1 in May. Analysts had expected a reading of 97.1.

Futures traders are pricing in less than a 15% chance of a hike at the Fed's September meeting, according to Investing.com’s Fed Rate Monitor Tool. Odds of a December increase was seen at about 35%.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

Elsewhere in precious metals trading, platinum tacked on $5.50, or 0.6%, to end at $926.80, for a weekly loss of about 1.1%, while palladium advanced $7.70, or 0.9%, to close at $865.65 an ounce, taking its weekly gain to roughly 2.8%.

Meanwhile, copper lost less than half a cent on Friday to settle at $2.564 a pound, ending about 3.2% lower for the week.

Following a busy week packed with central bank meetings, market players will focus on a handful of Federal Reserve speakers in the week ahead, as they look for more clues on future monetary policy moves.

Traders will also keep an eye out on more U.S. housing data to gauge if a recent downtick in consumer spending and inflation is translating into lower home prices and slack in sales.

Meanwhile, in Europe, market players eagerly await the start of Brexit negotiations between Britain and the European Union.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, June 19

Britain's Brexit minister David Davis and the European Union's chief negotiator Michel Barnier are due to start negotiations over Britain's departure from the bloc in Brussels.

New York Fed President William Dudley and Chicago Fed President Charles Evans are due to make public appearances.

Tuesday, June 20

Fed Vice Chair Stanley Fischer, Boston Fed President Eric Rosengren and Dallas Fed President Rob Kaplan are scheduled to deliver comments.

Wednesday, June 21

The National Association of Realtors is to release data on existing home sales.

Thursday, June 22

The U.S. is to produce weekly data on initial jobless claims.

Fed Governor Jay Powell is due to speak before the Senate Banking Committee.

Friday, June 23

The Commerce Department is to publish a report on new home sales.

St. Louis Fed President James Bullard, Cleveland Fed President Loretta Mester and Fed Governor Powell make public remarks.

Crude drifts a tad weaker in Asia ahead of U.S. rig count - Sean Seshadri

Crude prices drifted barely weaker oi Friday in Asia with investors eager to see if U.S. shale drillers keep pouring on the heat for OPEC and allies or whether recent price falls bring a pause.

On the New York Mercantile Exchange crude futures for July delivery fell 0.04% to $44.44 a barrel, while on London's Intercontinental Exchange, Brent was last quoted at $46.91 a barrel.

Energy services company Baker Hughes said last Friday that U.S. drillers last week added rigs for the 21st week in a row, the longest such streak on record. The U.S. rig count rose by 8 to 741, extending a year-long drilling recovery to the highest level since April 2015.

Overnight, crude futures settled lower on Thursday, amid growing investor skepticism in OPEC and its allies’ ability to reduce the glut in supply, as both OPEC and non-OPEC output remained elevated.

Crude futures extended losses for a second straight day, as investors continued to fret about growing US production after recent data showed an unexpected surge in gasoline inventories, pointing to a period of potential weak demand.

The Energy Information Administration said Wednesday that gasoline inventories, one of the products that crude is refined into, unexpectedly rose by roughly 2m barrels against expectations for a decline of 457,000 barrels.

The bearish inventory report added to the current negative sentiment on oil, after the International Energy Agency said Wednesday that non-Opec output was set to increase over the near term.

"For total non-OPEC production, we expect production to grow by 700,000 bpd this year, but our first outlook for 2018 makes sobering reading for those producers looking to restrain supply," the IEA said in its monthly oil market report.

Rising non-Opec output has dented Opec and its allies’ global pact to reduce oversupply in the market, which has pressured prices for nearly three years.

Investors, however, have started to question whether Opec would continue to remain compliant with its pledge to cut production by 1.2m barrels per day until March 2018, after the oil-cartel revealed an unexpected increase in output in May.

OPEC said Tuesday, that output from the group rose by 336,000 barrels per day in May to 32.14m barrels per day.