Oil prices rose on Friday morning in Asia, lifted by a statement from Saudi Arabia that production curbs led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia will need to be extended into 2019.
Crude Oil WTI Futures for May delivery were trading at $65.02 a barrel in Asia at 12:43PM ET (04:43 GMT), up 1.12%. Brent crude futures for May delivery, traded in London, were up 0.97% at $69.58 per barrel.
Saudi Arabian Energy Minister Khalid al-Falih said on Thursday that OPEC members will need to continue coordinating with Russia and other non-OPEC oil-producing countries on supply restraints in 2019 to reduce the global oil oversupply.
OPEC, of which Saudi Arabia is the de-facto leader, as well as a group of non-OPEC countries led by Russia, have been cutting crude output by 1.8 million barrels per day (bpd) to prop up oil prices. The pact began in January 2017 and is set to expire at the end of 2018, but Saudi Arabia now seems to be pushing for an extension.
OPEC said earlier this week that the cuts were close to having the desired effect of reducing global inventories to five year averages, although it gave little detail.
But according to Falih, there is still some time to go before inventories will be brought down to normal levels. The strategy for 2019 will hopefully be identified by year-end, he said.
Meanwhile, the U.S. continues to ramp up its crude production, which climbed to a new record of 10.4 million bpd last week, putting a drag on OPEC efforts to control supply. Having already surpassed top exporter Saudi Arabia in production, the U.S. is expected to overtake Russia as the top producer by late 2018, with output of more than 11 million bpd.
Although global demand looks healthy, non-OPEC supply, led by the U.S., will grow by 1.8 million bpd this year, while demand will only grow by about 1.5 million bpd.
Source By : www.jupiterr.co