Oil prices rose about 1 percent on Tuesday, supported by signs of tightening global supply after a Saudi official said the kingdom plans to cut oil exports in April, while a power outage in Venezuela reduced crude exports from the country.
Saudi Arabia, seeking to drain a supply glut and support prices, plans to cut its crude oil exports next month to below 7 million barrels per day (bpd), while keeping its output well below 10 million bpd, a Saudi official said on Monday.
Brent crude futures gained 42 cents, or 0.6 percent, to $67.00 a barrel by 11:06 a.m. EDT (1506 GMT). U.S. West Texas Intermediate (WTI) crude futures rose 55 cents, or 1 percent, to $57.34 a barrel.
Since the beginning of the year, both benchmarks have risen about 25 percent.
Crude has been supported since the Organization of the Petroleum Exporting Countries and its allies, including Russia, returned to supply cuts as of Jan. 1. The group, known as OPEC+, agreed to reduce supply by 1.2 million bpd for six months.
Riyadh has voluntarily cut its supply by more than the deal requires and in April will keep output “well below” 10 million bpd, the Saudi official said – less than the 10.311 million bpd that the kingdom had agreed to pump.
On Sunday, Saudi oil minister Khalid al-Falih said it would be too early to change OPEC+ output policy at the group’s meeting in April.
“Further statements out of Saudi Arabia reinforcing a production strategy to reduce output and exports further through the spring and possibly the summer months helped to trigger some bullish momentum to kick off this week,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
A host of involuntary supply curbs in OPEC members, caused by unrest in Libya and U.S. sanctions on Iran and Venezuela, have also boosted prices.
In addition, Venezuela’s state-run oil firm PDVSA has been unable to resume crude exports from its primary port since a power outage last week, people familiar with the matter said on Monday.
Offsetting these developments is the surge in U.S. supply, which the International Energy Agency said on Monday will drive global oil supply growth over the next five years.
In the near term, upcoming reports on U.S. inventories are expected to show that crude stocks rose 2.9 million barrels last week.
The first report, from the American Petroleum Institute, an industry group, is due at 4:30 p.m. EDT (2030 GMT), followed by the government’s official supply report on Wednesday.