Saudi Arabia and Russia promised increased compliance with their agreement to cut production while Oil prices inched higher on Monday, adding to the strong weekly rally seen last week.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., edged forward 6 cents , to $67.22, adding to a 2.1% or 0.09%, to $67.22.
Saudi Arabia , OPEC’s de-facto leader said on Sunday that balancing oil markets was far from done as inventories were still high, but the kingdom’s energy minister Khalid A. Al-Falih said he was optimistic about continued commitment to the oil supply cut agreement.
Allies led by Russia ,OPEC and non-OPEC referred to as “OPEC+”, agreed late last year to reduce output by 1.2 million barrels per day (bpd) in an effort to reduce oversupply and support prices.
Falih said “I am obviously optimistic that implementation of our OPEC+ agreement will improve, it’s already strong by historical standards.”
Falih noted that compliance with the agreement was overall lower in the first two months of the year when compared with 2017 and 2018, but was confident that producers “will catch up very soon”.
Alexander Novak the Russian energy minister also promised on Sunday that Moscow will become fully compliant with its agreed output cut over the coming weeks.
“As for the target output level that forms part of the signed agreement, we plan to reach those figures by the end of March (or) beginning of April. This is earlier than in the same period two years ago by about one month,” Novak said.
Meanwhile, data on Friday from energy services firm Baker Hughes showed that the number of active rigs drilling for oil in the U.S., an indicator of future output, fell for a fourth straight week.
Though the reading last week dropped by just one to 833, the downward trend helps ease concerns that escalating production stateside, already near record highs of 12.1 million bpd, would offset OPEC+’s efforts to rebalance the market.
In other energy trading, gasoline futures advanced 0.37% to $1.8645 a gallon by 9:39 AM ET (13:39 GMT), while heating oil dropped 0.33% to $1.9613 a gallon.
Lastly, natural gas futures traded up 1.43% to $2.835 per million British thermal unit./investing.com