Investing.com - Oil prices edged higher in European trading on Tuesday, but gains were limited as the market weighed ongoing efforts by major producers to cut output and reduce a global glut against a relentless increase in U.S. drilling activity.
The U.S. West Texas Intermediate crude July contract was at $46.23 a barrel by 2:55AM ET (0655GMT), up 15 cents, or around 0.3%.
Elsewhere, Brent oil for August delivery on the ICE Futures Exchange in London tacked on 16 cents to $48.45 a barrel.
Oil prices settled higher for the second-straight session on Monday.
Despite recent gains, oil prices have been under pressure for the past few weeks as concern over rising U.S. shale output offsets production cuts by OPEC and non-OPEC members.
U.S. drillers last week added rigs for the 21st week in a row, the longest such streak on record, implying that further gains in domestic production are ahead.
The U.S. rig count rose by 8 to 741, extending a year-long drilling recovery to the highest level since April 2015.
The increase in U.S. drilling activity and shale production has mostly offset efforts by OPEC and other producers to cut output in a move to prop up the market.
Last month, 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.
Investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2030GMT) later on Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 2.9 million barrels.
Meanwhile, OPEC and the IEA will release their monthly oil reports on Tuesday and Wednesday, respectively. They will include figures on the state of global-crude stockpiles. The data will give traders a better picture of whether a global rebalancing is taking place in the oil market.
Elsewhere on Nymex, gasoline futures for July inched up 0.3 cents, or about 0.3%, to $1.488 a gallon, while July heating oil added 0.2 cents to $1.428 a gallon.
Natural gas futures for July delivery dipped 0.9 cents to $3.015 per million British thermal units.