Published: Tue, March 12, 2019
Money | By Ralph Mccoy

Oil prices rise on ongoing OPEC-led supply cuts

Oil prices rise on ongoing OPEC-led supply cuts

The drop in fuel oil demand and the rise of petrochemicals over the next few years will benefit the US oil producers whose typical crude products are lighter, the IEA said.

Global benchmark May Brent crude, +0.81 per cent gained 95 cents, or 1.5 per cent to $66.69 a barrel on ICE Futures Europe, after the contract registered a weekly rise of one per cent on Friday. "But, barring this, I think we will just be kicking the can forward", Mr Falih said.

Saudi Arabia 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 - below the 10.311 million bpd that the kingdom had agreed to pump.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies such as Russian Federation - known as the OPEC+ alliance - will meet in Vienna on April 17-18, with another gathering scheduled for June 25-26.

On Jan. 1, OPEC+ began new production cuts to avoid a supply glut that threatened to soften prices. Six analysts polled by Reuters estimate they rose 2.9 million barrels.

Saudi Aramco, the state-owned oil monopoly, decided its monthly nominations over the weekend and told clients early on Monday their individual allocations.

The Saudi cuts come after Energy Minister Khalid Al-Falih told reporters in late February that USA crude inventories were "brimming" and reducing the glut was the main objective of the OPEC+ coalition.

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In Venezuela, suffering from a political and economic crisis, oil exports have plunged 40% to around 920,000 bpd since Washington slapped sanctions on its petroleum industry on January 28.

US crude oil output will rise almost 2.8 million bpd, growing to 13.7 million bpd in 2024 from an average of just under 11 million bpd in 2018, the IEA said, making the United States by far the biggest oil producer in the world.

On the other hand, production in U.S. hit a record of more than 12 million bpd in February.

The US could overtake Russian Federation and Saudi Arabia as the world's top oil exporter by 2024, the International Energy Agency (IEA) has predicted. "In addition, global GDP growth has been soft and oil demand has yet to pick up seasonally", Bank of America Merrill Lynch said in a report on Monday.

Oil rose to around $67 a barrel on Tuesday, supported by Saudi Arabia's plan for further voluntary supply curbs in April and by a cut in oil exports from Venezuela due to a power outage.

After the meeting, India's oil minister said he wanted Saudi Arabia to play an active role in keeping oil prices at a reasonable level as rising prices affect the Indian economy.

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