Brent oil extended gains into an eighth straight session on Wednesday, having recovered nearly all last month’s losses, after Saudi Arabia was said to be pushing its fellow OPEC members and some rivals to prolong supply cuts beyond June.
Brent crude futures were up 23 cents by 1130 GMT at $56.46 a barrel, having touched a one-month high of $56.65 earlier. If the day’s gains hold, it will be the longest winning streak for Brent since February 2012.
U.S. West Texas Intermediate (WTI) crude futures were up 18 cents at $53.58 a barrel, on track for a seventh straight session of gains.
OPEC countries cut oil output in March by more than they pledged, according to figures the group published in a monthly report on Wednesday, as it sticks to an effort to clear a supply glut that has weighed on prices.
Saudi Arabia, de-facto leader of the Organization of the Petroleum Exporting Countries, has told other producers that it wants to extend the coordinated production cut beyond the first half of the year, the Wall Street Journal reported.
“Given yesterday’s developments in the oil market it is rather surprising to have seen limited price gains across the board,” PVM Oil Associates analyst Tamas Varga said.
“Maybe the weekly EIA data … made buyers cautious,” Varga said. “Or maybe the sluggish stock market performance put a lid on yesterday’s price strength but we should not be surprised to see the oil market make amends today.”
OPEC and other producers, including Russia, have pledged to cut output by around 1.8 million barrels per day (bpd) during the first half of 2017 to rein in oversupply.
Fearing a loss of market share, Saudi Arabia is shielding its most important customers in Asia from the cuts, continuing to supply them with all contractual volumes.
In the United States, production and inventories are surging.
The government’s Energy Information Administration (EIA) said on Tuesday U.S. 2018 crude output <C-OUT-T-EIA> would rise to 9.9 million bpd, from 9.22 million bpd this year.
With demand expected to rise by 340,000 bpd in 2018, that would leave increasing amounts of U.S. oil for export or storage.
U.S. crude inventories hit a record 535.5 million barrels <C-STK-T-EIA> this month.
Official U.S. production and inventory data will be published later on Wednesday by the EIA.