Oil prices rose on Monday, driven by continued OPEC-led supply reductions and declining U.S. drilling activity, though economic slowdown fears tempered gains. Saudi Energy Minister Khalid al-Falih signaled OPEC+ would likely maintain production cuts past June, citing uncertainty over global market conditions.
U.S. West Texas Intermediate (WTI) crude futures climbed to $56.29 per barrel, up 0.4% from their previous close, while Brent crude rose to $65.91 per barrel. The increases followed a report showing U.S. oil rig counts fell by nine to 834, marking the third consecutive week of declines.
The OPEC+ alliance, which includes Russia, has cut 1.2 million barrels per day since early 2019 to stabilize markets. The group’s next meeting is scheduled for April 17-18 in Vienna, with a follow-up in June. Al-Falih told Reuters that any adjustments to output policy would depend on unforeseen disruptions, stating, "We will see what happens by April... barring this I think we will just be kicking the can forward."
Analysts noted that while U.S. drilling activity has slowed, output is still expected to surpass 13 million barrels per day soon. The decline in rigs follows a 2018 surge that pushed U.S. production to a record 12.1 million barrels per day in February 2019.
Market volatility persisted as U.S. employment data raised concerns about a potential global economic slowdown, despite recent U.S. growth resilience. ANZ Bank highlighted the drilling decline as a sign of reduced 2019 production spending outlooks.
