Crude prices rise, bolstered by Saudi output cuts

Opec oil production falls as Saudi Arabia slashes output

West Texas Intermediate crude for March delivery rose 31 cents to $53.41/bbl on the New York Mercantile Exchange at 8:40 a.m. local time after climbing as much as 79 cents earlier. Brent earlier in the session touched $63.98/Bbl, but pulled back after the inventory data was released.

European stock markets rallied following a flurry of upbeat earnings reports and after U.S. President Donald Trump said talks between Washington and Beijing over trade were going "very well". It saw its highest settlement since February 6, according to Dow Jones Market Data.

On the flip side, the analyst is cautious on his outlook for oil prices in the second half of 2019 due to low-priced US shale production that will come on line.

Venezuelan armed-forces backed Socialist president, Nicholas Maduro had been in the pursuit of OPEC support against USA sanctions inclined on country's oil industry, as Maduro sent a letter to OPEC headquarter on January 29th, citing the impact of sanctions on oil prices and the potential risk, the sanction could forge for other OPEC nations, revealed by a Reuters' reporter later on Monday (February the 11th).

The report put average Iranian crude output for the Q4 2018 at 3.004 million barrels per day indicating a near 600,000-bpd fall compared to the figure for Q3. Analysts polled by Reuters forecast an increase of 2.7 million barrels.

Saudi Arabia self-reported January production of 10.24 million b/d, its lowest monthly average since May 2018, and below its quota of 10.31 million b/d under the cut agreement.




Global oil cartel Opec said Tuesday it sharply reduced crude oil production last month, after heavyweight Saudia Arabia slashed output and exports fell in crisis-hit Venezuela.

USA crude oil inventories rose last week to the highest since Nov 2017 as refiners cut runs to the lowest since Oct 2017, the Energy Information Administration said.

On Tuesday, the American Petroleum Institute (API) said USA crude inventories fell by 998,000 barrels in the latest week, trouncing forecasts by analysts in a Reuters poll for a rise of 2.7 million barrels.

In the Organization of Economic Co-operation and Development (OECD), oil demand was revised down by 0.02 mb/d due to lower economic projections for OECD Americas in 1Q19 and OECD Europe for the whole of 2019, reads the report. This doesn't bode well for the long-term crude oil bulls. This is because the market is still oversupplied.

Most analysts expect that the OPEC+ supply curtailment deal will ultimately rebalance supply and demand and provide support for higher oil prices.

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