“It looks as if the market is coming into balance, and maybe into deficit later in the first part of the year,” Neil Atkinson, head of the oil industry and markets
division at the IEA, said in a Bloomberg television interview.
West Texas Intermediate crude for February delivery rose as much as 86 cents to $52.93 a barrel on the New York Mercantile Exchange, and was at $52.57 as of 12:28 p.m. London time. The contract lost 24 cents on Thursday. Futures are up 1.9 per cent this week.
Brent for March settlement advanced 46 cents to $61.64 a barrel on the London-based ICE Futures Europe exchange. Prices are up 2 per cent this week, and 15 per cent higher this month. The global benchmark crude was at an $8.79 premium to WTI for March.
Production from OPEC’s 14 members sank by 751,000 barrels a day last month, with just over half the reduction accounted for by Saudi Arabia, according to a report from the group’s secretariat. It’s the biggest cut since the organization kicked off a previous round of curbs in early 2017.
Earlier in the week, Saudi Energy Minister Khalid Al-Falih said he’s confident the cuts will have a “strong impact” on the market. His Russian counterpart, Alexander Novak, insisted his country is trying to speed up its agreed reduction, just days after Al-Falih said Moscow’s curbs had “started slower than I like.” Russia’s output level, along with that of the Saudis, is crucial to ensuring the success of the agreement to avert a further supply surplus.
In the US, crude production climbed by 200,000 barrels a day last week to 11.9 million, the highest level in weekly figures compiled by the Energy Information Administration since 1983. While nationwide inventories dropped for a sixth time in seven weeks, stockpiles of gasoline and distillates rose by more than twice the amount estimated in a Bloomberg survey.