Oil prices gain ground ahead of the weekend

Crude prices tilted higher in American trade even as the dollar index gained ground, after earlier data from the US, the world's largest energy consumer. 

As of 05:12 GMT, U.S. crude futures due on July 15 rose 0.59% to $49.19 a barrel from the opening of $48.90, while Brent crude futures due on July 15 rose 0.29% to $51.61 a barrel from the opening of $51.46, as the dollar index rose 0.23% to 97.47 from the opening of 97.25. 

Today's gains comes on short-covering after plunging nearly five percent yesterday after OPEC agreed with independent producers, including Russia, to extend output cuts by 1.8 million bpd until March. 

OPEC's energy ministers said that oversupply in the last three years, resulting from overproduction, won't diminish to five-year averages until the end of 2017 at the earliest, while Saudi energy minister Khalid Al Faleh said that cuts will curb global stocks to five-year averages by the first quarter of 2018.

Markets were disappointed, especially as U.S. shale production increases, with American producers adding 30 oil rigs a month, which would lead to a rise of 2.3 million bpd in US total output, casting a shadow over prices in 2018 and 2019. 

Otherwise, earlier U.S. data showed the GDP growing 1.2% in the first quarter according to the second reading, up from 0.7% in the first reading, and past expectations of 0.9%, while GDP prices rose 2.2%, down from 2.3% in the previous reading. 

Durable goods orders fell 0.7% in April, compared to a 0.9% rise in March, and besting forecasts of a 1.4% drop. 

Core orders fell 0.4%, compared to no-change in March, while analysts expected a 0.4% rise, reflecting the possibility of continued slowdown in US growth in the second quarter, which could weigh on the Federal Reserve's policy decisions in June. 

On another note, U.S. president Donald Trump proposed his first budget plan, aiming to cut government spending by $3.6 trillion and balance the budget in the next decade, while proposing to sell half the country's strategic crude reserves, estimated at 687.7 million barrels, in specific locations in Texas and Louisiana.

Trump aims to sell 270 million barrels of U.S. oil reserves in the next decade, which would provide $500 million in the next 2018 financial year, and $16.6 billion in the next decade, while BP started its Quad 204 project in the Northern sea in Britain, expected to produce nearly 130 thousand bpd. 

Similarly, Iran's National Oil Company announced a plan to increase Iranian crude production by 8% by March, 2018, while production will resume from a currently-disabled oil field in Libya by next month, paving the road for current sharp corrections on prices after the recent gains.