Oil prices rise as Saudi Arabia supports OPEC cuts

11 March 2019 (Last Updated March 11th, 2019 10:40)

Oil prices have increased after Saudi Arabia oil minister Khalid al-Falih said that it would be too early to change the Organization of the Petroleum Exporting Countries’ (OPEC) output policy.

Oil prices rise as Saudi Arabia supports OPEC cuts
OPEC+ has pledged to cut 1.2 million barrels per day in crude supply since the start of this year. Credit: Al.

Oil prices have increased after Saudi Arabia oil minister Khalid al-Falih said that it would be too early to change the Organization of the Petroleum Exporting Countries’ (OPEC) output policy.

Brent crude futures increased 28 cents at $65.02 per barrel, while US West Texas Intermediate (WTI) crude oil futures edged up 30 cents at $56.36 per barrel, Reuters reported.

Al-Falih told Reuters: “We will see what happens by April, if there is any unforeseen disruption somewhere else, but barring this I think we will just be kicking the can forward.” He added that OPEC-led supply cuts were unlikely to end before June 2019.

In 2019, oil markets gained support from ongoing supply cuts led by OPEC and non-affiliated members such as Russia, in an alliance known as OPEC+.

OPEC+ has pledged to cut 1.2 million barrels per day (Mboe/d) in crude supply since the start of 2019 to tighten markets and increase prices.

“We will see what happens by April, if there is any unforeseen disruption somewhere else, but barring this I think we will just be kicking the can forward.”

The group is set to meet in Vienna on 17-18 April to discuss supply policy, with another meeting scheduled for 25-26 June.

US firm Baker Hughes released its latest report highlighting a fall in the number of rigs drilling for new oil production by nine to 834, offering support to prices.

ANZ Bank said: “This is the third straight week of decline after a number of oil producers trimmed their spending outlooks for 2019.”

Despite the rise in oil prices, markets were held back after employment data in the US raised concerns that an economic slowdown in Asia and Europe was spilling into the US.