Oil prices rose on Monday as Saudi Arabia`s energy minister said an OPEC-led production cut scheduled to end in June would likely be extended to cover all of the year, or even into 2018, although another increase in U.S. drilling capped gains, according to Reuters.
Brent crude futures were at $49.48 per barrel at 06:52 GMT (2.52 a.m. ET), up 38 cents, or 0.75 percent, from their last close, as reported by Reuters.
U.S. West Texas Intermediate (WTI) crude futures were at $46.52 per barrel, up 30 cents, or 0.7 percent.
Saudi Arabia`s energy minister Khalid Al-Falih said on Monday oil markets were rebalancing after years of oversupply, but that he still expected the OPEC-led deal to cut output during the first half of the year to be extended.
”Based on the consultations I have had with participating members, I am rather confident the agreement will be extended into the second half of the year and possibly beyond,” said Falih, Saudi Minister of Energy, Industry and Mineral Resources, during an industry event in Malaysia`s capital Kuala Lumpur on Monday.
The Organization of the Petroleum Exporting Countries (OPEC), of which Saudi Arabia is the de-facto leader, as well as other producers including Russia, pledged to cut output by almost 1.8 million barrels per day (bpd) during the first half of the year to prop up the market.
The comments from Falih and rising prices came after steep falls last week due to ample supply in countries that aren`t participating in the cuts, including the United States where output is soaring.
A decision on whether to continue the production cuts is expected at OPEC`s next official meeting on May 25.