Oil prices edged slightly higher overnight, supported by signs of tightening global supply after a Saudi official said the kingdom plans to cut oil exports in April, while the US government reduced its forecast for domestic crude output growth.
Saudi Arabia, seeking to drain a supply glut and support prices, plans to cut its crude oil exports next month to below 7 million barrels per day (bpd), while keeping its output well below 10 million bpd, a Saudi official said on Monday.
Brent crude futures rose 9 US cents, or 0.1 per cent, to settle at $US66.67 a barrel.
US West Texas Intermediate (WTI) crude futures rose 8 US cents, or 0.1 per cent, to settle at $US56.87 a barrel.
Since the beginning of the year, both benchmarks have risen around 25 per cent.
Crude has been supported since the Organisation of the Petroleum Exporting Countries and its allies, including Russia, returned to supply cuts as of January 1.
The group, known as OPEC+, agreed to reduce supply by 1.2 million bpd for six months.
Riyadh has voluntarily cut its supply by more than the deal requires and in April will keep output ‘well below’ 10 million bpd, the Saudi official said – less than the 10.311 million bpd that the kingdom had agreed to pump.
On Sunday, Saudi oil minister Khalid al-Falih said it would be too early to change OPEC+ output policy at the group’s meeting in April.
The United Arab Emirates in February exceeded its OPEC target for oil output cuts, achieving 119 per cent of its goal, the country’s energy minister said on Tuesday at an energy conference.
A host of involuntary supply curbs in OPEC members, caused by unrest in Libya and US sanctions on Iran and Venezuela, have also boosted prices.
In addition, Venezuela’s state-run oil firm PDVSA has been unable to resume crude exports from its primary port since a power outage last week, people familiar with the matter said on Monday.
In the United States, domestic crude production is expected to grow slower than previously anticipated in 2019, averaging about 12.3 million bpd, the US Energy Information Administration (EIA) said.
‘Part of the pushback against OPEC+ efforts has been this idea of unrelenting growth in US oil production, primarily shale. The EIA report reined some of that in, and the report was supportive in that respect,’ said John Kilduff, a partner at Again Capital LLC in New York.
However, the EIA cut its 2019 world oil demand growth forecast by 40,000 bpd to 1.45 million bpd.
In the near term, upcoming reports on US inventories are expected to show that crude stocks rose 2.7 million barrels last week.