Oil futures headed higher on Monday amid reports that Saudi Arabia planned to extend efforts to reduce crude exports.
April West Texas Intermediate crude CLJ9, +1.43% rose 48 cents, or 0.9%, to $56.55 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 LCOK9, +1.35% gained 54 cents, or 0.8%, to $66.528 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 meeting 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.
The news comes after active U.S. rigs drilling for oil fell by nine to 83 last week, according to data from Baker Hughes BHGE, +2.86% reported Friday. The data imply a slowdown in domestic production activity.
Meanwhile, the International Energy Agency’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 saw mixed trading on Nymex in Monday dealings, with April gasoline RBJ9, +1.48% up 1.4% at $1.826 a gallon and April heating oil HOJ9, +0.18% down 0.1% at $1.998 a gallon. April natural gas NGJ19, -3.00% traded at $2.778 per million British thermal units, down 3%.
Christopher Alessi contributed to this article
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