Published: Tue, March 12, 2019
Markets | By Otis Pena

Oil Prices Jump As Saudis Promise To Do "Whatever It Takes"

Oil Prices Jump As Saudis Promise To Do

Meanwhile, West Texas Intermediate gained 0.33 percent to $56.98, while Brent crude, the worldwide benchmark, recovered 0.23 percent to $66.73 per barrel on March 12.

Oil markets have been supported this year by 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 tighten markets and prop up prices.

"It will see the United States account for 70 percent of the rise in global oil production and some 75 percent of the expansion in LNG trade over the next five years".

The so-called OPEC+ alliance, including Russian Federation and other producers, agreed in December to reduce supply by 1.2 million bpd from 1 January for six months, which will help to boost oil prices after last year's downward trend.

Oil prices edged slightly higher on Tuesday, 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. The lower allocations by Saudi Aramco for April will also mean that the Kingdom's oil production will be "well below 10 million bpd" in April, a Saudi official told Reuters.

OPEC member United Arab Emirates (UAE) said on Sunday it would continue to meet its obligations to cut supply under the producer agreement.

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Prices were also supported by USA 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.

A host of involuntary supply curbs in OPEC members caused by unrest in Libya, and US sanctions on Iran and Venezuela, have also helped to boost prices. Six analysts polled by Reuters estimate they rose 2.9 million barrels.

Global oil demand growth is set to ease as China slows, but will still rise by an annual average of 1.2 million bpd to 2024 when it will reach 106.4 million bpd.

"Part of the pushback against OPEC+ efforts has been this idea of unrelenting growth in USA oil production, primarily shale".

The International Energy Agency last month left its demand growth forecast for 2019 unchanged from January at 1.4 million barrels per day. U.S. West Texas Intermediate crude added 57 cents to $57.36.

The first report, from the American Petroleum Institute, an industry group, is due at 4:30 p.m. EDT (2030 GMT), followed by the government's official supply report on Wednesday.

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