Oil Trading Near $67 on Additional Cuts

• Oil Trading Near $67 on Additional Cuts

Global oil prices rose on Tuesday as the largest OPEC’s producer Saudia Arabia pledged to cut additional supply in April and power outage in Venezuela disrupts supply from the embattled nation.

Brent Crude oil, the global benchmark against which Nigerian crude is measured, rose by 57 cents to $66.75 a barrel at 1430 GMT, while the U.S. West Texas Intermediate gained 68 cents to $57.47.

The surged in prices was attributed to a comment from a Saudi official that the Kingdom would reduce crude supply in April to drain global oil glut and maintain supply at a level well below what is required of the oil giant by OPEC+.

“This shows Saudi Arabia’s resolve to keep the oil market balanced by keeping oil supply tight,” said Carsten Fritsch, an analyst at Commerzbank.

“Additional buoyancy has come from news that the massive power outage in Venezuela is also hampering the country’s oil exports.”

The Brent crude has now gained 25 percent since OPEC+ agreed to further reduce supplies to boost prices.

Saudi will now keep output at about 10 million barrels per day, according to the official. That is 311,000 barrels below the 10.311 million bpd the Kingdom had agreed to pump.

“We see a tightening underlying physical crude balance as a key pillar of support for outright prices at this point in the year,” said analysts at JBC Energy in a report.

A positive China-US deal should further boost the oil price to $70 as shown in the chart above.