Saudi Arabia Signals Commitment to Oil-Production Cuts


April West Texas Intermediate crude fell 34 cents, or 0.6%, to $60.37 a barrel on the New York Mercantile Exchange.

Brent crude futures were at US$64.74 per barrel, up 10 cents, or 0.15%.

In all, 24 countries that control about 60% of global crude production pledged to withhold about 1.8 million barrels a day of output-almost 2% of the world's output.

Information released Wednesday by the U.S. Energy Information Administration showed crude inventories rose by five million barrels in the week ending March 9, compared with analysts' expectations for an increase of two million barrels.

Oil prices were roughly flat on Wednesday as weekly USA government data showed a larger-than-expected rise in crude stockpiles south of the border, but substantial declines in fuel inventories as refineries hiked output.

"The drop in product stocks is significant with refinery utilization up 2% to 90%", said James Williams, energy economist at WTRG Economics. Gasoline futures surged 1% as stockpiles sank the most since September.

Support also came from China, where January-February domestic crude oil production fell 1.9% on the year to 30.37 million tonnes, equivalent to 3.77 million barrels per day (bpd), according to data from the National Statistical Bureau on Wednesday.

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The EIA's report Wednesday showed that total US crude output edged up by 12,000 barrels to 10.381 million barrels a day last week.

"We are now only two to four weeks away from when weekly oil inventory data will start to draw again which should be supportive for oil prices", SEB commodities strategist Bjarne Schieldrop said.

"With the tug of war between the USA and OPEC the soap opera continues", said Scott Gecas, senior strategic account executive at Long Leaf Trading Group.

The OPEC-led production cuts have been part of a recipe for higher oil prices including strong global economic growth and rising Middle East political tensions.

There is a split between Saudi Arabia and Iran on the ideal oil price. He will likely push for the U.S. to exit the nuclear deal with the Persian Gulf nation in May, and could advocate for tougher sanctions on Venezuela, which might boost oil prices, she said.

While it was widely expected that OPEC's production in February would be well below the implied combined ceiling of about 32.73 million bpd, analysts and players were eager to see how low the oil production of crisis-stricken Venezuela dipped last month.