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Oil gains as Saudi Arabia stands by OPEC cuts, US drilling drops

Oil gains as Saudi Arabia stands by OPEC cuts, US drilling drops

LONDON: Oil prices rose on Tuesday, lifted by comments from Saudi Energy Minister Khalid al-Falih that an end to OPEC-led supply cuts was unlikely before June and a report showing a fall in US drilling activity.

US West Texas Intermediate (WTI) crude oil futures were at $56.42 per barrel at 1200 GMT, up $0.35, or 0.62%, from their last close. Brent crude futures were at $66.17 per barrel, up $0.43, or 0.65%.

Falih told Reuters on Sunday it would be too early to change a production curb pact agreed by the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russia before the group’s meeting in June.

“We will see what happens by April, if there is any unforeseen disruption somewhere else, but barring this I think we will just be kicking the can forward,” Falih said.

Oil markets have been supported this year by ongoing supply cuts by the group called OPEC+, which has pledged to cut 1.2 million barrels per day (bpd) in crude supply since the start of the year to tighten markets and prop up prices.

The group will meet on April 17-18, with another gathering scheduled for June 25-26, to discuss supply policy. A Saudi official also said on that the country plans to cut crude oil exports in April to below 7 million bpd.

Prices were also buoyed by US energy services firm Baker Hughes’ latest weekly report showing the number of rigs drilling for new oil production in the United States fell by nine to 834.