NEW YORK (Reuters) - Oil futures inched up on Tuesday after news that OPEC would continue production cuts despite comments from U.S. President Donald Trump, who criticized the producer group for rising crude prices a day earlier.
Prices fell more than 3.5 percent on Monday, their biggest daily percentage drop this year, after Trump said he wanted the Organization of the Petroleum Exporting Countries to ease its efforts to boost oil prices.
An OPEC source told Reuters on Tuesday OPEC would stick to its agreement and push for more adherence from its members and producer allies to tighten crude supplies regardless of Trump’s recent tweet.
The OPEC source said the cartel, along with non-member producers, would continue its supply-cut agreement to balance the market until they see inventories fall to their five-year average. “There is no doubt we will continue with our reduction as planned,” the OPEC source said.
Brent crude futures, the global benchmark, rose 45 cents to settle at $65.21 a barrel. U.S. West Texas Intermediate crude futures were up 2 cents to settle at $55.50 a barrel.
“After yesterday’s pullback, the market is trying to stabilize again,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. “We’re basically turning our focus back to expectations of the producer output cuts and also the sanctions on Venezuela continuing to tighten supplies,” McGillian said.
Oil prices have risen about 20 percent since the start of the year largely on an agreement by OPEC and non-member producers, including Russia, to reduce production. Supplies from Venezuela have been curtailed since U.S. sanctions were imposed to try to oust President Nicolas Maduro.
OPEC+ agreed in December to cut supply by 1.2 million barrels per day from Jan. 1 for six months. Saudi Arabia, OPEC’s top producer, recently estimated its supply would fall in March by a half-million more barrels a day than anticipated under the supply-reduction agreement.
Libya’s internationally recognized government agreed with the state oil company to reopen the country’s largest oilfield, El Sharara, according to a statement on Tuesday, weighing on prices.
Investors are also looking ahead to weekly figures on U.S. crude inventories. U.S. crude stocks are expected to rise by 3.6 million barrels in weekly inventory reports. The first such report is due at 4:30 p.m. EST (2130 GMT) from the American Petroleum Institute.
Reporting by Laila Kearney; Additional reporting by Alex Lawler in London; Koustav Samanta in Singapore and Colin Packham in Sydney; Editing by Tom Brown and Lisa Shumaker