* Armed protesters block 250,000 bpd of production in Libya
* OPEC-led production cut expected to be extended into H2
* China becomes no.3 overseas destination for U.S. crude -
By Henning Gloystein
SINGAPORE, March 29 Oil prices on Wednesday
extended gains from the previous session, lifted by supply
disruptions in Libya and expectations that an OPEC-led output
reduction will be extended into the second half of the year.
Prices for front-month Brent crude futures, the
international benchmark for oil, had risen 14 cents from their
last close to $51.47 per barrel by 0127 GMT.
In the United States, West Texas Intermediate (WTI) crude
futures were up 20 cents at $48.57 a barrel.
Both crude benchmarks rose by more than 1 percent the
Oil production from the western Libyan fields of Sharara and
Wafa has been blocked by armed protesters, reducing output by
252,000 barrels per day (bpd), a source at the National Oil
Corporation (NOC) told Reuters late on Tuesday.
"That (Libya), along with the Iranian oil minister saying
there is likely to be an extension to the production cut deal
helped crude oil rally overnight," said Greg McKenna, chief
market strategist at futures brokerage AxiTrader.
The Organization of the Petroleum Exporting Countries
(OPEC), along with some other producers including Russia, have
agreed to cut production by almost 1.8 million bpd during the
first half of the year in order to rein in a global fuel supply
overhang and prop up prices.
But as markets remain bloated halfway into the cuts, there
is a broad expectation that the supply cuts will be extended
into the second half of the year.
Despite the rising consensus of extended cuts, the OPEC-led
strategy to re-balance oil markets is not without controversy.
As OPEC and especially Saudi Arabia cut their production,
other producers not participating in the cuts have been quick to
fill the supply gap and gain market share.
In the United States in particular, shale oil drillers have
seized the opportunity to ramp up output and exports.
As a result, China became the third biggest overseas
destination for U.S. crude oil in 2016, according to data from
the Energy Information Administration (EIA), up from ninth
position the previous year.
"In 2016, U.S. crude oil exports averaged 520,000 bpd, 12
percent above the 2015 level, despite a year-over-year decline
in domestic crude oil production," the EIA said.
With U.S. oil production rising sharply again this year
C-OUT-T-EIA, traders expect American exports to surge further
(Reporting by Henning Gloystein; Editing by Richard Pullin)