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 U.S. crude 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 signaled 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.
Brent crude futures rose 22 cents to US$67.38 a barrel. The global benchmark reached a 2019 high of US$68.14 last week. U.S. West Texas Intermediate crude added 42 cents at US$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 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.