Oil Refinery
Isla Oil Refinery PDVSA terminal in Willemstad on the island of Curacao. Image Credit: REUTERS

LONDON: Brent oil edged up to $65 (Dh239) a barrel on Tuesday as Saudi Arabia and the rest of Opec were expected to stick to their policy of cutting production, despite renewed pressure from US President Donald Trump.

Crude had slid on Monday, when many traders were out of the office attending IP Week, a series of industry events in London, after Trump called on Opec to ease its efforts to boost the oil market. Prices were “getting too high”, he said.

“Yesterday was a typical price action you see during IP Week when you have a headline,” said Olivier Jakob, oil analyst at Petromatrix. “But I don’t think it will change anything in current Opec supply policy.”

Brent crude, the global benchmark, rose 24 cents to $65.00 by 0939 GMT, after losing 3.5 per cent on Monday. US West Texas Intermediate crude eased 15 cents to $55.33.

Expectations that US crude inventories had risen for a sixth straight week limited the rally.

US crude stocks were seen 3.6 million barrels higher in weekly inventory reports, underlining that supply is adequate in the world’s top consumer. The first such report is due at 2130 GMT from the American Petroleum Institute.

Oil is up about 20 per cent since the start of the year, when the Organization of the Petroleum Exporting Countries and non-member producers, such as Russia, began cutting production in an effort to reduce a global glut.

Saudi Arabia and other Opec members are likely to be cautious about relaxing their supply-cut plan, Jakob said, after a boost in output in the second half of last year ahead of US sanctions on Iran led to a steep slide in prices.

Oil broker PVM took a similar view.

“Will the kingdom budge and increase production or at least keep it steady,” said PVM’s Tamas Varga. “Just two weeks after announcing deeper cuts, it would be a capitulation.”

US sanctions against Opec members Iran and Venezuela have also contributed to the gains and are providing a floor for prices, analysts say.

Optimism about a US-China trade deal also helped prices to rally.

Trump on Monday said he may soon sign a deal to end a trade war with Chinese President Xi Jinping if their countries can bridge remaining differences.