NEW YORK (Reuters) - Oil prices edged higher on Monday, rebounding further from 1-1/2-year lows reached in December, on support from OPEC production cuts and steadying equities markets.
Brent crude LCOc1 futures rose 27 cents to settle at $57.33 a barrel, a 0.47 percent gain. U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 56 cents to settle at $48.52 a barrel, a 1.17 percent gain.
Oil futures have gained more than 7 percent since last Monday.
“Momentum is coming back into the market from very depressed price levels,” Petromatrix strategist Olivier Jakob said.
Prices drew support from a Wall Street Journal report saying that Saudi Arabia is planning to cut crude exports to around 7.1 million barrels per day (bpd) by the end of January.
OPEC and its allies are trying to rein in a surge in global supply, driven mostly by the United States, where production surpassed 11 million bpd in 2018. Record high crude oil production C-OUT-T-EIA has pushed up U.S. inventories.
OPEC oil supply fell in December by 460,000 barrels per day (bpd) to 32.68 million bpd, a Reuters survey found last week, led by cuts from top exporter Saudi Arabia.
“We continue to view the OPEC production cuts that became official last week as a legitimate bullish consideration and we still look for the reduction to translate to a reduced U.S. crude surplus that could potentially be erased in some 8-9 weeks,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
U.S. crude inventories at Cushing, Oklahoma, the delivery point for U.S. crude futures, fell by 565,000 barrels from last Tuesday to Friday, traders said, citing data from market intelligence firm Genscape.
More upbeat equity markets also offered support.
“When stock markets are strong oil usually follows suit,” PVM Oil Associates strategist Tamas Varga said.
Shares have risen on expectations that trade talks this week between the United States and China will ease the trade war. Disruptions to trade undermine prospects for economic growth and oil demand. [MKTS/GLOB]
Goldman Sachs said in a note it had downgraded its average Brent crude oil forecast for 2019 to $62.50 a barrel from $70 due to “the strongest macro headwinds since 2015.”
Societe Generale cut its 2019 oil price forecast for Brent by $9 to $64 a barrel and reduced its forecast for U.S. light crude by $9 to $57 a barrel.
GRAPHIC: U.S. oil production, drilling & storage levels : tmsnrt.rs/2GVNTmb
GRAPHIC: U.S. commercial crude oil inventories : tmsnrt.rs/2Axoc67
Additional reporting by Amanda Cooper in London and Henning Gloystein in Singapore; Editing by Phil Berlowitz and Sandra Maler