International oil prices rose on Monday, extending gains from Friday when producer club OPEC and some non-affiliated producers agreed a supply cut of 1.2 million barrels per day (bpd) from January. International Brent crude oil futures were at $61.81 per barrel at 0016 GMT, up 14 cents, or 0.2 percent, from their last close.
Prices surged on Friday after the Organisation of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers including heavyweight Russia announced they would cut oil supply by 1.2 million bpd, with an 800,000 bpd reduction planned by OPEC-members and 400,000 bpd by countries not affiliated with the group.
U.S. West Texas Intermediate (WTI) crude futures were at $52.35 per barrel, 26 cents, or 0.5 percent, below their last close, weighed down as America’s booming oil drilling industry is not taking part in the announced cuts.
The OPEC-led supply curbs will be made from January, measured against October 2018 output levels. “Our key conclusion is that oil prices will be well supported around the $70 per barrel level for 2019,” analysts at Bernstein Energy said on Monday.
Despite the cuts, that was still a price forecast reduction of $6 per barrel as Bernstein reduced its crude oil demand forecast from 1.5 million bpd previously to 1.3 million bpd for 2019.
The slowdown in demand-growth comes on the back of increasing fuel efficiency and because of an economic slowdown. Japan, the world’s third biggest economy and No.4 oil consumer, on Monday revised its third quarter GDP growth down to an annualised rate of -2.5 percent, down from the initial estimate of -1.2 percent.
Meanwhile, the two world’s biggest economies, the United States and China, are locked in a trade war which is threatening to slow global growth and battering investor sentiment. Despite the announced cuts, Brent crude prices are almost 29 percent below their most recent highs in early October.