Oil prices climbed on Monday amid signals from Saudi Arabia that OPEC-led supply cuts would remain in place beyond June, while U.S. drilling activity declined. Brent crude futures rose 0.5% to $65.04 per barrel, and U.S. West Texas Intermediate (WTI) gained 0.6% to $56.39, according to Reuters reports.
Saudi Energy Minister Khalid al-Falih indicated during a Sunday interview that OPEC+ would not revise output policies at its April meeting, stating, "We will see what happens by April... barring this I think we will just be kicking the can forward." The OPEC+ alliance, which includes Russia, has maintained a 1.2 million barrels per day (bpd) production cut since early 2019 to stabilize markets.
U.S. oil rig counts fell by nine to 834 in the latest Baker Hughes report, marking the third consecutive week of declines. This follows a 2018 surge that pushed U.S. output to 12.1 million bpd, making it the world’s top crude producer. Analysts remain divided on whether output will surpass 13 million bpd despite the slowdown.
Market gains were tempered by concerns over global economic growth, with OECD and ECB forecasts of reduced expansion limiting bullish momentum. Phillip Futures analyst Benjamin Lu noted, "Downward revisions in global growth forecasts by OECD and ECB have capped bullish gains." OPEC+ will reconvene in Vienna on April 17-18 and June 25-26 to assess supply strategies.
Analysts at ANZ Bank highlighted the ongoing decline in U.S. drilling activity, linking it to reduced capital spending by oil producers in 2019. The report noted, "This is the third straight week of decline...after a number of oil producers trimmed their spending outlooks for 2019."
U.S. oil rig count graphic | Russian, U.S. & Saudi crude oil production data
Reporting by Henning Gloystein; editing by Richard Pullin
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