Oil gains, with global benchmark prices poised for highest finish since November

Oil futures gained Wednesday, unfazed by data showing a fourth straight weekly rise in U.S. crude supplies, as reports of further reductions to global output and optimism around constructive U.S.-China trade negotiations bolstered prices. De facto leader of the Organization of the Petroleum Exporting Countries, Saudi Arabia, pledged to cut output further in the coming months, according to the Financial Times (paywall), citing oil minister Khalid al-Falih, who said the country would cut an additional 500,000 barrels a day to take production to 9.8 million barrels a day in March.

“This would be [approximately] 500,000 barrels per day less than stipulated in the production cuts agreement, meaning significant over compliance with the requirements,” said analysts at Commerzbank in a research note. Also Wednesday, the International Energy Agency said in a monthly report that global supply fell by 1.4 million to 99.7 million barrels a day in January.The gains for crude come despite data from the Energy Information Administration Wednesday that revealed domestic crude supplies rose by 3.6 million barrels for the week ended Feb. 8. That marked a fourth-straight week rise, and was larger than the 2.7 million-barrel rise expected by analysts polled by S&P Global Platts. The American Petroleum Institute data on Tuesday showed a decline of 998,000 barrels, according to sources. “Despite a big drop in imports due to inclement weather on the Gulf Coast last week, a plumbing of the depths in terms of refinery maintenance has meant we have still seen a build to crude inventories,” said Matt Smith, director of commodity research at ClipperData. Separately, a monthly EIA report released Tuesday revealed higher U.S. crude production forecasts for 2019 and 2020. The report also included higher WTI and Brent price forecasts for this year, but reduced the 2020 price views for both benchmarks by more than 4%. On Tuesday, OPEC said its crude output fell by 797,000 barrels a day in January, month on month, to average 30.81 million barrels a day, in the cartel’s separate monthly production update.