Picture: REUTERS
Picture: REUTERS

London — Oil rose to about $67 a barrel on Tuesday, supported by Saudi Arabia’s plan for further voluntary supply curbs in April and by a cut in oil exports from Venezuela due to a power outage.

Saudi Arabia, seeking to drain a supply glut and support prices, plans, in April, to keep its oil output well below the level required of it as part of an oil cartel Opec-led supply cutting deal, a Saudi official said on Monday.

Brent crude, the global benchmark, rose by 70c to $67.28 a barrel at 9.58am GMT. US West Texas Intermediate (WTI) crude added 5c to $57.36.

“This shows Saudi Arabia’s resolve to keep the oil market balanced by keeping oil supply tight,” said Carsten Fritsch, analyst at Commerzbank. “Additional buoyancy has come from news that the massive power outage in Venezuela is also hampering the country’s oil exports.”

Crude has rallied this year after Opec and its allies including Russia, a group known as Opec-Plus, returned to supply cuts as of January 1.

Saudi Arabia has voluntarily cut its supply by more than the deal requires and in April will keep output “well below” 10-million barrels per day (bpd), the Saudi official said — below the 10.311-million bpd that the kingdom had agreed to pump.

“We see a tightening underlying physical crude balance as a key pillar of support for outright prices at this point in the year,” said analysts at JBC Energy in a report.

A host of involuntary supply curbs in Opec members caused by unrest in Libya, and US sanctions on Iran and Venezuela, have also helped to boost prices.

Venezuela’s state-run oil firm PDVSA has been unable to resume crude exports from its primary port since a power outage last week, people familiar with the matter said on Monday.

Offsetting these developments is the surge in US supply, which the International Energy Agency (EIA) said on Monday will continue to 2024, probably requiring Opec and its allies to keep up their policy of market management.

In the near term, the latest reports on US inventories are expected to show a rise in crude stocks. Six analysts polled by Reuters estimate they rose 2.9-million barrels.

The first report, from the American Petroleum Institute (API), an industry group, is due out 8.30pm GMT, followed by the government’s official supply report on Wednesday.