London: Oil rose to around $67 (Dh246) a barrel on Tuesday, supported by Saudi Arabia’s plan for further voluntary supply curbs in April and a cut in oil exports from Venezuela due to a power outage.
Saudi Arabia, seeking to drain a supply glut and support prices, plans in April to keep its oil output well below the level required of it as part of an OPEC-led supply cutting deal, a Saudi official said on Monday.
Brent crude, the global benchmark, rose by 57 cents to $67.15 a barrel at 1305 GMT. US. West Texas Intermediate crude added 47 cents to $57.26.
“This shows Saudi Arabia’s resolve to keep the oil market balanced by keeping oil supply tight,” said Carsten Fritsch, an analyst at Commerzbank.
“Additional buoyancy has come from news that the massive power outage in Venezuela is also hampering the country’s oil exports.” Crude rallied this year after the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as Opec+, returned to supply cuts as of Jan. 1.
Since then, Brent has surged 25 per cent.
Saudi Arabia has voluntarily cut its supply by more than the deal requires and in April will keep output “well below” 10 million barrels per day (bpd), the Saudi official said — less than the 10.311 million bpd that the kingdom had agreed to pump.
“We see a tightening underlying physical crude balance as a key pillar of support for outright prices at this point in the year,” said analysts at JBC Energy in a report.
A host of involuntary supply curbs in Opec members, caused by unrest in Libya and US sanctions on Iran and Venezuela, have also boosted prices.
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 US supply, which the International Energy Agency said on Monday would continue to 2024, probably requiring Opec and its allies to keep up their policy of market management.
In the near term, the latest reports on US inventories are expected to show a rise in crude stocks. Six analysts polled by Reuters estimate they rose 2.9 million barrels last week.
The first report, from the American Petroleum Institute, an industry group, is due out 2030 GMT, followed by the government’s official supply report on Wednesday.