By Jenny W. Hsu 
 

Oil futures added to overnight gains in Asian trading Tuesday as fresh pledges from Saudi Arabia and Nigeria to respectively pull back on exports and output raised hopes that market rebalancing is on the way.

At an Organization of the Petroleum Exporting Countries meeting on Monday, Saudi Arabia announced it would cut August exports to 6.6 million barrels a day, which would be a million less than a year earlier. The kingdom, the world's biggest crude exports, typically rolls back shipments in the summer as domestic demand peaks. But a shipment cut of that size would notably expedite market rebalancing, some analysts contend.

Meanwhile, Nigeria--which has been exempt from this year's OPEC-led production-cut deal--pledged to not top daily production of 1.8 million barrels. The cartel's latest data put the country's output at 1.64 million.

"These two factors are very-good signs for the oil markets because at least we know exactly what the upside risks are," said Barnabas Gan, an economist at OCBC.

He added that if Libya, another OPEC nation currently not in the cutback deal, caps its output at 1.25 million barrels a day (some 25% above current production), the scope of Saudi Arabia's export cut will still be sufficient to offset potential production increases from Libya and Nigeria.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in September recently traded up 0.6% at $46.64 a barrel in the Globex electronic session. September Brent crude on London's ICE Futures exchange rose 0.6% to $48.91.

Oil prices have been in a funk for three years amid a persistent supply glut of supplies. To chisel down the global inventories, OPEC and a host of non-cartel heavyweights such as Russia agreed to cut their collective production by 1.8 million barrels a day. Market impact has been little thus far amid output growth from the U.S. this year. But some say the effort is a sound solution to bring supply and demand closer to equilibrium, or perhaps push the market into a slight deficit.

Chinese demand, meanwhile, continues to provide support. The country's implied oil demand rose 6% from a year earlier in June, amid aggressive stockpile-building, said Energy Aspects.

Also, there's signs this year's shale upswing may be ebbing. New-drilling growth has slowed this month, Baker Hughes data show, while oilfield-services heavyweight Halliburton Co. said Monday that activity is showing signs of plateauing. That as government data on Wednesday are poised to show another drop in oil supplies, says S&P.

Refined-products prices also rose in Tuesday's Asia trading. Nymex September reformulated gasoline blendstock gained 0.4% to $1.5390 a gallon, diesel rose 0.4% to $1.5284 and August ICE gasoil added 0.1% to $451.75 a metric ton.

Write to Jenny W. Hsu at jenny.hsu@wsj.com

(END) Dow Jones Newswires

July 24, 2017 23:12 ET (03:12 GMT)