International Brent crude futures hit a high of $66.78 per barrel before easing to $66.65 per barrel rising by 0.6 per cent from its last close. U.S. West Texas Intermediate crude oil futures pushed through $56 per barrel for the first time this year, hitting $56.13 a barrel before edging back to $56.02 a barrel, still up 0.8 per cent from last settlement. For both benchmarks, these were their highest levels since Nov. 20, 2018.
The Organisation of the Petroleum Exporting Countries (OPEC), as well as some non-affiliated producers like Russia, agreed late last year to cut output by 1.2 million barrels per day (bpd) to prevent a large supply overhang from swelling more. Further pushing up crude prices have been U.S. sanctions against oil exporters and OPEC-members Iran and Venezuela. Traders said financial markets, including crude futures, were also generally supported by hopes that the United States and China would soon resolve their trade disputes, which have dragged on global economic growth.
“Positive signs in the U.S.-China trade talks helped boost sentiment across markets,” ANZ bank said on Monday. At least partly offsetting supply falls has been a surge in U.S. crude oil production by more than 2 million bpd in 2018, to a record 11.9 million bpd. And there are signs that U.S. output will rise further. U.S. energy firms on Feb. 12 increased the number of oil rigs looking for new production by three, to a total of 857, energy services firm Baker Hughes said in a weekly report lon Feb. 15. That means the U.S. rig count is higher than a year ago when fewer than 800 rigs were active.
