OPEC Oil Production Drops to 10-Month Low

Saudi oil minister hopes OPEC, allies can ease output curbs in 2019

The West Texas Intermediate for April delivery increased 0.26 US dollar to settle at 61.25 dollars a barrel on the New York Mercantile Exchange, while Brent crude for May delivery added 0.54 dollar to close at 64.37 dollars a barrel on the London ICE Futures Exchange. The price for Brent crude oil, the global benchmark, was up 0.18 percent as of 9:17 a.m. EST to $66.64 per barrel. "It is more about the broader trade environment", said Harry Tchilinguirian, senior oil analyst at BNP Paribas, adding that Trump's latest decision has the potential to damage relationships with the US's trading partners or even spark a trade war that could impact oil markets.

Oil output in Venezuela, one of OPEC's larger producers, has dropped to its lowest in more than 20 years as the country grapples with an economic crisis, in turn helping curtail OPEC's supply beyond the group's agreed 1.2-million bpd commitment.

The Organization of the Petroleum Exporting Countries meets for a dinner on Monday in Houston with USA shale firms, the latest sign of the producer group widening talks about how best to tame a global oil glut.

USA light crude CLc1 is forecast to average $58.88 a barrel in 2018, up from $58.11 in the January poll. Crude prices remained under pressure from concerns that USA production may be high enough to offset output cuts from OPEC and Russian Federation, he said.

"One of the things that contributed to the strength of the (oil) market was the weakness of the United States dollar over the past couple months", said Gene McGillian, manager of market research at Tradition Energy in Stamford. The WSJ Dollar Index, which measures the US currency against a basket of 16 others, was recently down 0.26%.




OPEC officials are expected to meet USA shale executives next week in Houston, at the annual CERAWeek conference, presented by IHS Markit. Friday's move came as stock indexes pared losses or turned higher.

A market tilted toward the supply side eventually pushed the price of crude oil below $30 per barrel and members of the Organization of Petroleum Exporting Countries are working to drain the overhang on the global market through coordinated production cuts.

"The standoff "shale versus sheikh" continues to frame the oil market, with the former again gaining the upper hand", said Norbert Ruecker, head of macro and commodity research at Julius Baer.

Oil also fell due to a stronger dollar, which makes commodities denominated in the US currency more expensive for holders of other currencies.

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