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Crude Oil Jumps More than 1% As Saudi Arabia Cuts Output

March 11, 2019 at 22:56 by Vladimir Vyun

Futures for crude oil gained more than 1% on Monday as Saudi Arabia pledged to curb its production even more. For a long time, production cuts by the Organization of Petroleum Exporting Countries and several non-OPEC producers were supporting oil prices. Usually, Saudi Arabia was the main proponent of such measures, and it looks like the Middle Eastern country continues to push for even more cuts. A Saudi official announced that the country is planning to produce less than 10 million barrels per day, while keeping exports below 7 million bpd in April, even though demand for Saudi exports exceeds 7 million bpd. The official said:

Despite very strong demand from international waterborne customers at more than 7.6 million bpd, customers were allocated less than 7 million bpd.

There were other supportive fundamentals as well. Baker Hughes reported that the US oil rig count fell by 9 last week, demonstrating the third consecutive weekly decline. The Commitment of Traders report from the Commodity Futures Trading Commission showed that hedge funds and money managers increased their long positions on West Texas Intermediate crude oil on the New York Mercantile Exchange by 15,410 to 239,723, while decreased short positions by 12,743 to 63,656 as of March 5.

Futures for delivery of WTI grade oil in April climbed 1.28% to $56.79 per barrel as of 22:27 GMT on NYMEX today. Brent crude for delivery in May gained 1.35% to $66.63 per barrel on ICE.

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