Oil prices rose on Monday after Saudi Arabia stated that cooperation between oil producers will continue beyond 2018.
Traders pointed out strong global economic growth and a drop in U.S. drilling activity as crude supporters too.
Brent crude futures were at $68.89 per barrel at 0315 GMT. It was up 0.4 percent or 25 cents from previous close. On January 15, Brent climbed to $70.37 which was its highest since December 2014.
Saudi Arabia is known as the world’s top oil exporter. It is also the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC).
The country affirmed on Sunday that major oil producers agreed that cooperation on oil production should continue. This is despite the deal on supply cuts’ supposed expiration this year.
“There is a readiness to continue cooperation beyond 2018…The mechanism hasn’t been determined yet, but there is a consensus to continue,” said Saudi Arabia’s Energy Minister Khalid al-Falih.
The group of oil producers includes OPEC, Russia, which is the world’s biggest crude producer, and nine other global producers. They had an agreement wherein they cut oil output by 1.8 million barrels per day (bpd) in January 2017 in order to prop up prices.
The deal is meant to expire by March 2018, having already been extended once.
In other energy trading, gasoline futures stood at $1.872 a gallon, rising 0.2 percent. Heating oil gas on the other hand was little changed at $2.058 a gallon.
Natural gas futures rose 2 percent or 6.3 cents to $3.248 per million British thermal units.
Oil Dropped as Concerns over U.S. Production Rose
Last week, oil prices posted their first weekly loss in five weeks. This is due to rising concerns that U.S. production might make a sharp rebound.
The International Energy Agency (IEA) released its monthly report on Friday. There, it warned that rapidly increasing U.S. production would offset a raft of positive factors supporting oil prices which includes OPEC output cuts.
According to the report, the IEA is already expecting U.S. output levels to soon exceed 10 million bpd. This will then put the country ahead of OPEC behemoth Saudi Arabia and Russia.
Data from the Energy Information Administration showed that U.S. crude production was at 9.75 million bpd on January 12.