LONDON: Oil steadied around its highest prices in three weeks on Monday, supported by comments from Saudi Arabia that it would continue to curb shipments in line with the Opec-led effort to cut global supplies.
Brent crude was last down 8 cents on the day at $67.23 a barrel at 1005 GMT, after having risen almost 4 per cent last week in its largest weekly gain since late October.
US West Texas Intermediate crude for April delivery eased 5 cents to $63.50 a barrel after rising 3 per cent last week.
Both contracts earlier rose to their highest since February 7. A cold snap across Europe has encouraged some refiners to delay maintenance, which could support demand and help to put an end to a mild bout of profit-taking, analysts said.
“There is a bit of a bearish twinge to everything... but we believe in the second half (of the year), you’ll see demand pull the market back up again,” Natixis oil analyst Joel Hancock said.
“Our view is demand will be strong enough, but we don’t see a big breakout, $60 to 70 is the range we’re seeing for this year.”
Prices did draw some support from Saudi Arabian oil minister Khalid al Falih, who on Saturday said the country’s crude production in January-March would be well below output caps, with exports averaging less than 7 million barrels per day.
Saudi Arabia hopes Opec and its allies will be able to relax production curbs next year and create a permanent framework to stabilise oil markets after the current agreement on supply cuts ends this year, Falih said.
“A study is taking place and once we know exactly what balancing the market will entail, we will announce what is the next step. The next step may be easing of the production constraints,” he told reporters in New Delhi.
“My estimation is that it will happen sometime in 2019. But we don’t know when and we don’t know how”. US energy companies last week added one oil rig, the fifth weekly increase in a row, bringing the total count up to 799, the highest since April 2015, Baker Hughes energy services firm said.
Hedge funds and money managers upped their bullish wagers on US crude oil for the first time in four weeks. — Reuters
Oman Observer is now on the WhatsApp channel. Click here
