Oil futures headed higher on Monday amid reports that Saudi Arabia planned to extend efforts to reduce crude exports.
News that Venezuela’s crude exports have taken a hit in the wake of a mostly nationwide power outage that began late last week has also provide support for oil prices.
April West Texas Intermediate crude
rose 86 cents, or 1.5%, to $56.93 a barrel on the New York Mercantile Exchange, after prices rose 0.5% last week, according to Dow Jones Market Data.
Global benchmark May Brent crude
gained 95 cents, or 1.5%, to $66.69 a barrel on ICE Futures Europe, after the contract registered a weekly rise of 1% on Friday.
Reuters cited Riyadh’s oil minister in reporting that Saudi Arabia plans to cut its oil exports to below 7 million barrels a day, while keeping its output “well below” 10 million barrels a day, in an attempt to alleviate a glut of supply.
Saudi Energy Minister Khalid al-Falih told Reuters on Sunday that it would be too early to change a production curb pact agreed by OPEC and its allies, which includes Russia, another major producer, before June.
The Joint Ministerial Monitoring Committee, or JMMC, which monitors compliance with output reductions, is scheduled to meet in Azerbaijan on March 18. OPEC’s next scheduled meeting will be held on April 17-18. Reports also say the group will again meet in late June to discuss production levels.
“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.
So far, Saudi Arabia, OPEC’s de facto leader, has shouldered most of the burden of trimming output to boost crude prices.
Contributing further support to oil prices Monday, OPEC member Venezuela’s main oil export terminal and crude processing complex have been shut down as a result of record power outages in the country that began on Thursday, energy news provider Argus reported Monday.
Venezuela is home to the world’s largest proved oil reserves, but according to an annual output report released Monday from International Energy Agency, the country’s crude output is expected to fall from 1.3 million barrels a day in 2018 to 750,000 barrels a day in 2019 as U.S. sanctions on Venezuela remain in place.
The news comes after active U.S. rigs drilling for oil fell by nine to 83 last week, according to data from Baker Hughes
reported Friday. The data imply a slowdown in domestic production activity.
Meanwhile, the IEA’s annual oil outlook indicated that OPEC members, including Russia, have been effective in reducing global output.
A survey last week from S&P Global Platts showed OPEC output in February fell to a nearly four-year low.
However, the IEA report predicted a “second U.S. shale revolution is coming,” potentially bringing unprecedented growth in the U.S. oil-and-gas industry in the coming years, which could weigh on crude prices.
Oil prices settled lower on Friday, following weaker-than-expected monthly U.S. jobs data.
“WTI futures came for sale in a big way as demand expectations fell due to sharply rising growth concerns,” said Tyler Richey, co-editor at the Sevens Report.
“Looking ahead, the path of least resistance for WTI is down towards support in the low $50s, but if volatility continues to flare and growth concerns persist (the two go hand in hand), then it will be hard for WTI prices to hold on to a $50 handle.”
Oil products climbed on Nymex in Monday dealings, with April gasoline
up 1.5% at $1.829 a gallon and April heating oil
edging up by 0.2% at $2.003 a gallon. April natural gas
however, traded at $2.781 per million British thermal units, down 2.9%.
Monthly oil reports are due out this week, from the Energy Information Administration on Tuesday, OPEC on Thursday and the IEA Friday.
Christopher Alessi contributed to this article
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