Crude Oil Prices Settle Higher as Expectations For Continued Output Cuts Grow

Investing.com – Crude oil prices settled higher as rising Libyan oil output was offset by ongoing optimism that major oil producers would remain committed to the deal to curb production.

On the New York Mercantile Exchange for March delivery rose 26 cents to settle at $63.57 a barrel, while on London’s Intercontinental Exchange, gained 45 cents to trade at $69.08 a barrel.

Saudi Oil Minister Khalid al-Falih said he would like to see the deal between OPEC and Russia reducing exports by 1.8 million barrels per day to continue beyond the year-end expiration.

That stoked investor optimism that major oil producers would continue strong compliance with the OPEC-led deal to curb output despite the threat of a ramp up in US shale production.

Crude prices struggled to advance to session highs as reports that Libya’s As-Sarah oilfield resumed production, which is expected to add around 55,000 barrels per day (BPD) to global supplies, limited upside momentum.

Crude prices snapped a four-week winning streak last week as traders questioned whether the recent rally in oil prices was overdone amid expectations that US production would soon rise above 10 million barrels a day.

Investor fears over rising US production comes despite data showing the number of US rigs drilling for oil fell last week by 5 to 747, according energy services firm Baker Hughes.

U.S. crude production rose by 258,000 barrels per day (bpd) to 9.75 million barrels per day last week, the Energy Information Agency (EIA) reported last week.

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