SINGAPORE: Oil prices edged up on Monday after Saudi oil minister Khalid al-Falih said an end to OPEC-led supply cuts was unlikely before June, while a report showed US drilling activity fell for a third straight week.
The news took downward pressure from oil markets that had built the previous week on the back of surging US crude output and an economic slowdown especially in Asia and Europe.
US West Texas Intermediate (WTI) crude oil futures were at $56.26 per barrel at 0016 GMT, down 19 cents, or 0.3 per cent, from their last settlement.
Brent crude futures were at $65.91 per barrel, down 17 cents, or 0.3 per cent.
Saudi oil minister Khalid al-Falih told Reuters on Sunday it would be too early to change OPEC+ output policy at the group’s meeting in April.
The Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia – known as the OPEC+ alliance – will meet in Vienna on April 17-18, with another gathering scheduled for June 25-26.
OPEC+ has pledged to cut 1.2 million barrels per day (bpd) in crude supply since the start of the year in order to tighten markets and prop up prices.
Falih said the group was unlikely to change its output policy in April.
“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,” Falih said.
Prices were also supported by a weekly report by US energy services firm Baker Hughes, which showed last Friday that the amount of rigs drilling for new oil production in the United States fell by nine last week to 834.
High drilling activity last year resulted in a more than 2 million bpd rise in production , to a record 12.1 million bpd reached this February.
“This is the third straight week of decline… after a number of oil producers trimmed their spending outlooks for 2019,” ANZ bank said on Monday.
The slowdown in drilling points to more timid output growth going forward, but because the overall drilling level remains relatively high despite the recent decline, many analysts still expect US crude output to rise above 13 million bpd soon.