OIL began the week on the rebound, as Saudi Arabia moved to extend supply curbs and a nationwide blackout threatened deep production cuts in Venezuela.
Futures in New York climbed as much as 1.7pc after dropping 1pc on Friday amid weak employment data in the US. Saudi Arabia plans to produce well below 10 million barrels a day in April, a Saudi official said over the weekend.
Meanwhile, crude output from fellow Organization of Petroleum Exporting Countries (Opec) member Venezuela has collapsed in recent days after a four-day power outage, according to a senior oil ministry official there.
In terms of production, “there’s nothing really bearish about the markets”, said Brynne Kelly, an energy trader and analyst in New York. “We still have Canada holding back; we still have Opec cuts. At the moment, inventories aren’t out of line.”
Oil has traded in a tight range above $55 (€49) this month in New York, after rallying more than 30pc from December lows amid output curbs by Opec and its allies. Disruptions in Venezuela, Libya and Iran have also tightened supplies, although US production is at a record high.
Turmoil in Venezuela, owner of the world’s biggest crude reserves, is leading its production to slide “significantly,” said the head of the International Energy Agency.
State-owned Petroleos de Venezuela and its joint venture partners are struggling to operate wells and other facilities during the power outage that began last week, said a ministry official. They called the production losses severe but didn’t give specific details.
With plans to export less than seven million barrels a day, Saudi Arabia will supply clients with significantly less oil than they’ve requested for April, the Saudi official said.
With Venezuelan output falling due to US sanctions and power blackouts, refiners have asked for more than 7.6 million barrels a day, the person said.