Oil prices climbed on Monday,
pushed higher by Saudi Arabia’s comment that cooperation between oil producers
currently withholding supplies would continue beyond 2018.
Strong global economic growth and
a drop in U.S. drilling activity also supported crude oil price, traders said.
Brent crude futures were at 68.89
dollars a barrel at 0315 GMT, up 25 cents, or 0.4 per cent from their last
close.
Brent on Jan. 15 rose to 70.51
dollars, its highest since December 2014.
U.S. West Texas Intermediate
(WTI) crude futures were at 63.61 dollars a barrel, up 24 cents, or 0.4 per
cent, from their last settlement.
WTI climbed to 64.89 dollars on
Jan. 16, also its highest since December 2014.
Saudi Arabia, the world’s top oil
exporter and de-facto leader of the Organization of the Petroleum Exporting
Countries (OPEC), said on Sunday that major oil producers were in agreement
that they should continue cooperating on production after their deal on supply
cuts expires this year.
“There is a readiness to continue
cooperation beyond 2018…The mechanism hasn’t been determined yet, but there is
a consensus to continue,” Saudi Arabia’s Energy Minister Khalid al-Falih said
in Oman.
A group of oil producers
including OPEC and Russia, started to withhold production in January last year
to prop up prices.
The deal is set to expire at the
end of 2018.
In the United States, declining
drilling activity for new oil production further supported crude.
U.S. drillers cut five oil rigs
in the week to Jan. 19, bringing the count down to 747, energy services firm
Baker Hughes said on Friday.
In spite of this, the rig count
in 2017 and early this year remains much higher than in 2016, resulting in a 16
per cent rise in U.S. production C-OUT-T-EIA since mid-2016, to 9.75 million
barrels per day.
Beyond supplies, strong global
economic growth was also supporting oil prices.
In the latest indicator, Japanese
manufacturing sentiment in January jumped to an 11-year high, the Media Tankan
poll showed on Monday, highlighting the optimism driven by nearly two years of
economic expansion.
In spite of the well supported
market, analysts warned that oil markets had lost some steam since their peak
early last week.
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