Boats float in front of the Vopak oil storage terminal in Johor, Malaysia. Picture: REUTERS/HENNING GLOYSTEIN
Boats float in front of the Vopak oil storage terminal in Johor, Malaysia. Picture: REUTERS/HENNING GLOYSTEIN

Singapore — Oil prices rose on Monday, lifted by comments from Saudi oil minister Khalid al-Falih that an end to Opec-led supply cuts was unlikely before June and a report showing a fall US drilling activity.

US West Texas Intermediate (WTI) crude oil futures were at $56.39 a barrel at 3.23am GMT GMT, up 32c, or 0.6% from their last close.

Brent crude futures were at $65.04 a barrel, up 30c, or 0.5%.

Despite the gains, markets were somewhat held back after US employment data raised concerns that an economic slowdown in Asia and Europe was spilling into the US, where growth has so far still been healthy.

“Downward revisions in global growth forecasts by OECD [Organisation for Economic Co-operation and Development] and ECB [European Central Bank] have capped bullish gains,” said Benjamin Lu of Singapore-based brokerage Phillip Futures.

Oil markets have generally been supported this year by ongoing supply cuts led by oil cartel Opec and some non-affiliated allies like Russia — known as the Opec-plus alliance. Opec-plus has pledged to cut 1.2-million barrels a day in crude supply since the start of the year to tighten markets and prop up prices.

The group will meet in Vienna on April 17-18, with another gathering scheduled for June 25-26, to discuss supply policy.

Saudi oil minister Khalid al-Falih told Reuters on Sunday it would be too early to change Opec-plus output policy at the group's meeting in April.

“We will see what happens by April, if there is any unforeseen disruption somewhere else, but barring this I think we will just be kicking the can forward,” Falih said.

Prices were also supported by US energy services firm Baker Hughes’ latest weekly report showing the number of rigs drilling for new oil production in the US fell by nine to 834.

High drilling activity last year resulted in a more than 2-million barrels a day rise in production, to 12.1-million barrels a day reached this February, making the US the world’s biggest producer of crude oil ahead of Russia and Saudi Arabia.

The slowdown in drilling points to more timid output growth going forward, but because the overall drilling level remains relatively high despite the recent decline, many analysts still expect US crude output to rise above 13-million barrels a day soon.

“This is the third straight week of decline … after a number of oil producers trimmed their spending outlooks for 2019,” ANZ bank said on Monday.