Oil up on deeper production cuts, trade news

Oil prices gained more than 1% on Wednesday in Asia, supported by OPEC and Saudi Arabia production cuts. Positive trade news also lifted investor sentiment.

Crude Oil WTI Futures was up 1.1% at 53.6 per barrel by 12:36 AM ET (05:36 GMT). It lost 4.6% last week for its steepest weekly decline this year.

Brent Oil Futures, the global oil benchmark, rose 1.2% to $63.03 per barrel.

The Organization of the Petroleum Exporting Countries (OPEC) said on Tuesday that it had cut its output by almost 800,000 bpd in January to 30.81 million bpd.

Meanwhile, Saudi Energy Minister Khalid al-Falih said the kingdom will pump just 9.8 million bpd in March, more than 500,000 bpd below what it agreed to in December with the enlarged OPEC+10 group including Russia to lift crude prices.

However, some analysts said global oil markets remain well supplied despite the OPEC and Saudi cuts.

Markets were amply supplied due to “adequate global oil inventories, the prospect of weakened demand tied both to US-China trade and broader economic concerns, the approach of seasonal refinery maintenance – when crude oil demand declines – and an influx of new supply from the United States and elsewhere,” Frank Verrastro, senior vice president for the Energy and National Security Program at the Center for Strategic and International Studies (CSIS), said in a note that was cited by Reuters.

Elsewhere, oil prices were also lifted by more positive trade comments coming out from the US side.

US President Donald Trump said on Tuesday that he is willing to extend the March 1 deadline if China and the US get closer to a deal soon. US Treasury Secretary Steven Mnuchin told reporters earlier in the day that he hopes for “productive” trade meetings in China.

The Energy Information Administration said separately on Tuesday that US output was expected to reach a record high 12.41 million bpd this year and 13.2 million bpd next year.