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With Opec likely to ignore Trump, oil prices edge up
[NEW YORK] Oil futures inched up on Tuesday after news that Opec would continue production cuts despite comments from US President Donald Trump, who criticised the producer group for rising crude prices a day earlier.
Prices fell more than 3.5 per cent on Monday, their biggest daily percentage drop this year, after Mr Trump said he wanted the Organization of the Petroleum Exporting Countries to ease its efforts to boost oil prices.
An Opec source told Reuters on Tuesday Opec would stick to its agreement and push for more adherence from its members and producer allies to tighten crude supplies regardless of Mr Trump's recent tweet.
The Opec source said the cartel, along with non-member producers, would continue its supply-cut agreement to balance the market until they see inventories fall to their five-year average. "There is no doubt we will continue with our reduction as planned," the Opec source said.
Brent crude futures, the global benchmark, rose 45 cents to settle at US$65.21 a barrel. US West Texas Intermediate crude futures were up 2 cents to settle at US$55.50 a barrel.
"After yesterday's pullback, the market is trying to stabilize again," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. "We're basically turning our focus back to expectations of the producer output cuts and also the sanctions on Venezuela continuing to tighten supplies," Mr McGillian said.
Oil prices have risen about 20 per cent since the start of the year largely on an agreement by Opec and non-member producers, including Russia, to reduce production. Supplies from Venezuela have been curtailed since US sanctions were imposed to try to oust President Nicolas Maduro.
Opec+ agreed in December to cut supply by 1.2 million barrels per day from Jan 1 for six months. Saudi Arabia, Opec's top producer, recently estimated its supply would fall in March by a half-million more barrels a day than anticipated under the supply-reduction agreement.
Libya's internationally recognised government agreed with the state oil company to reopen the country's largest oilfield, El Sharara, according to a statement on Tuesday, weighing on prices.
Investors are also looking ahead to weekly figures on US crude inventories. US crude stocks are expected to rise by 3.6 million barrels in weekly inventory reports. The first such report is due at 4.30pm EST (2130 GMT) from the American Petroleum Institute.