Oil gains 1 percent as Saudi minister stands by OPEC output cuts
Oil prices rose 1 percent on Monday, lifted by comments from Saudi Energy Minist...
NEW YORK (Reuters) - Oil prices rose 1 percent on Monday, lifted by comments from Saudi Energy Minister Khalid al-Falih that an end to OPEC-led supply cuts was unlikely before June.
Brent crude futures were up 65 cents, or 1 percent, to $66.39 a barrel by 10:56 a.m. EDT (1456 GMT).
U.S. West Texas Intermediate (WTI) crude futures rose 52 cents, or 0.9 percent, to $56.59 a barrel.
Falih told Reuters on Sunday it would be too early to change a production curb pact agreed by the Organization of the Petroleum Exporting Countries and allies including Russia before the group’s meeting in June.
“We will see what happens by April, if there is any unforeseen disruption somewhere else, but barring this I think we will just be kicking the can forward,” Falih said.
Oil markets have been supported this year by the ongoing supply cuts by the group called OPEC+, which has pledged to cut 1.2 million barrels per day (bpd) in crude supply since the start of the year to prop up prices.
The group will meet on April 17-18, with another gathering scheduled for June 25-26, to discuss supply policy.
Falih’s comments “show more than anything that Saudi Arabia and the OPEC cartel is serious about tightening up this oil market,” said Phil Flynn, analyst at Price Futures Group in Chicago.
In addition, a Saudi official said the country planned to cut crude oil exports in April to below 7 million barrels per day.
Prices were also buoyed by U.S. energy services firm Baker Hughes’ latest weekly report showing the number of rigs drilling for new oil production in the United States fell by nine to 834.
But the Paris-based International Energy Agency said on Monday that crude output in the United States will rise nearly 2.8 million bpd to 13.7 million bpd in 2024 from about 11 million bpd in 2018.
“The United States is increasingly leading the expansion in global oil supplies, with significant growth also seen among other non-OPEC producers, including Brazil, Norway and new producer Guyana,” the IEA, an adviser to the United States and other industrialized countries, said in its outlook.
Markets were pressured after U.S. employment data on Friday raised concerns that an economic slowdown in Asia and Europe was spilling into the United States.
“Brent prices have struggled to push firmly above $65/bbl in part because a strong U.S. dollar remains a major headwind for commodity prices. In addition, global GDP growth has been soft and oil demand has yet to pick up seasonally,” Bank of America Merrill Lynch said in a report.
But citing the OPEC+ cuts and low global stocks, the bank predicted prices for Brent would reach $70 a barrel this year.
(GRAPHIC: U.S. oil rig count link:tmsnrt.rs/2V1n5mN)
(GRAPHIC: Russian, U.S. & Saudi crude oil production link: tmsnrt.rs/2EUHeFO)
(GRAPHIC: U.S. crude exports surge to record link: tmsnrt.rs/2NW392C)
Reporting by Stephanie Kelly in New York; additional reporting by Noah Browning in London and Henning Gloystein in Singapore; editing by Alexander Smith and David Evans