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Brent oil prices rise after Opec-led group announces 1.2m bpd supply cut
[SINGAPORE] International oil prices rose on Monday, extending gains from Friday when producer club the Organisation of the Petroleum Exporting Countries (Opec) and some non-affiliated producers agreed a supply cut of 1.2 million barrels per day (bpd) from January.
International Brent crude oil futures were at US$61.81 per barrel at 0016 GMT, up 14 US cents, or 0.2 per cent, from their last close.
Prices surged on Friday after Opec and some non-Opec producers including heavyweight Russia announced they would cut oil supply by 1.2 million bpd, with an 800,000 bpd reduction planned by Opec-members and 400,000 bpd by countries not affiliated with the group.
US West Texas Intermediate (WTI) crude futures were at US$52.35 per barrel, 26 US cents, or 0.5 per cent, below their last close, weighed down as America's booming oil drilling industry is not taking part in the announced cuts.
The Opec-led supply curbs will be made from January, measured against October 2018 output levels.
"Our key conclusion is that oil prices will be well supported around the US$70 per barrel level for 2019," analysts at Bernstein Energy said on Monday.
Despite the cuts, that was still a price forecast reduction of $6 per barrel as Bernstein reduced its crude oil demand forecast from 1.5 million bpd previously to 1.3 million bpd for 2019.
The slowdown in demand-growth comes on the back of increasing fuel efficiency and because of an economic slowdown.
Japan, the world's third biggest economy and No.4 oil consumer, on Monday revised its third quarter GDP growth down to an annualised rate of -2.5 per cent, down from the initial estimate of -1.2 per cent.
Meanwhile the two world's biggest economies, the United States and China, are locked in a trade war which is threatening to slow global growth and battering investor sentiment.
Despite the announced cuts, Brent crude prices are almost 29 per cent below their most recent highs in early October.