Oil prices rise amid lower U.S. oil rig count

Oil prices rise amid lower U.S. oil rig count

Oil prices rise amid lower U.S. oil rig count

Oil prices reversed earlier falls on Friday, lifted by OPEC's ongoing supply cuts and hopes that Washington and Beijing may soon end their trade dispute.

International Brent crude futures were at 67.14 dollars per barrel, 6 cents above their last close and not far off their 2019 peak, hit the day before, of 67.38 dollars per barrel.

As output surges, United States oil stocks are also rising.

-West Texas Intermediate futures, the USA oil standard, were up 1.3% at $57.78 a barrel on the New York Mercantile Exchange. -China trade talks would soon produce a deal, although new record US oil supply limited gains.

(GRAPHIC: U.S. oil production & storage levels link: https://tmsnrt.rs/2Vanxza).

"The continued surge in USA production stands as a bearish dynamic for market prices, especially as increasing volumes get sold overseas in a direct challenge to Saudi Arabia and Russian Federation", said John Kilduff, partner at Again Capital in NY. "Anything positive today on trade talks will boost the oil price".

Prices continue to be supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russian Federation. OPEC and 10 allied producers outside the cartel, led by Russian Federation, agreed in late December to collectively hold back output by 1.2 million barrels day for the first half of 2019.

Oil prices have been driven up this year after the Organization of the Petroleum Exporting Countries and producer allies such as Russian Federation, known as OPEC+, agreed to cut output by 1.2 million barrels per day (bpd) to prevent a supply overhang from growing. That makes it "the only country ever to reach this milestone", said Stephen Brennock, analyst at brokerage PVM Oil Associates Ltd.

Crude inventories rose by 3.7 million barrels in the week to February 15, compared with analysts' expectations for an increase of 3.1 million barrels.

Both oil benchmarks have risen this year after the Organization of the Petroleum Exporting Countries and its allies, including Russian Federation, began to cut output to prevent a supply glut from growing.

Official oil inventory and production data is due from the U.S. Energy Information Administration (EIA) after 1800 GMT on Thursday.

The bank said that some weeks could see 4.6 million bpd of gross crude exports by year-end, topping this week's record of 3.6 million bpd.

With U.S. supply surging, Goldman Sachs said it expected non-OPEC supply to grow by 1.9 million bpd this year, more than offsetting the OPEC cuts.

Given the supply and demand picture, Goldman said "we expect $60-$65 per barrel Brent prices, on average, in 2019 and 2020".

Related news