Retail

Oil up as OPEC-led supply cuts support, Cushing draws down


© Reuters. Pump jacks are silhouetted against the rising sun on an oilfield in Baku

By Laila Kearney

NEW YORK (Reuters) – Oil prices edged up on Monday, supported by the prospect of prolonged OPEC-led oil supply curbs and signs of inventory declines at the delivery point for futures.

The Organization of the Petroleum Exporting Countries and its allies met in Azerbaijan to monitor their crude supply reduction pact, where they said they would exceed commitments in the coming months.

The group agreed to cancel their April meeting, meaning the next meeting of the producer group known as OPEC+ will not be until June.

On Sunday, Saudi Arabia signalled the producers may need to extend the 1.2 million barrels per day of supply curbs past June into the second half of 2019.

“As long as the levels of inventories are rising and we are far from normal levels, we will stay the course, guiding the market towards balance,” al-Falih said.

futures rose 22 cents to $67.38 a barrel by 11:33 a.m. EST (1533 GMT). The global benchmark reached a 2019 high of $68.14 last week. U.S. West Texas Intermediate crude added 42 cents at $58.94 a barrel.

“The chatter out of the OPEC meeting was sufficiently supportive to get us going,” said John Kilduff, a partner at Again Capital LLC in New York.

Brent has gained about 25 percent since the start of the year due to supply cuts since Jan. 1 led by OPEC and allies, known as OPEC+, as well as U.S. sanctions on Iran and Venezuela.

“The strategy of OPEC+ already appears to be bearing fruit,” said analysts at Commerzbank (DE:) in a report.

Signs of a reduction in crude inventory levels at the U.S. storage hub in Cushing, Oklahoma also boosted futures, market participants said.

Crude stockpiles at Cushing, the delivery point for WTI, fell 1.08 million barrels in the week on Friday, traders said, citing data from market intelligence firm Genscape.

Surging oil output in the United States has helped to offset the OPEC-led curbs.

Concerns about a global economic slowdown also weighed on oil prices after data showed Japan’s exports fell for a third month in February.

Analysts at Bernstein Energy said that while they expect oil demand to rise by 1.3 million bpd in 2019, a global slowdown could limit growth to below 1 million bpd.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.