Oil prices hit fresh 2019 highs on Tuesday, nearly touching $60 a barrel after signs that OPEC and allied producers will reinforce their efforts to keep the global market balanced as the world economy slows down.
New York-traded West Texas Intermediate crude futures gained 35 cents, or 0.6%, at $59.73 a barrel by 8:08 AM ET (12:05 GMT).
Brent crude futures, the benchmark for oil prices outside the U.S., traded up 54 cents, or 0.8%, at $68.08.
Both blends have risen around 30% so far this year as they benefit from aggressive production cuts agreed by OPEC and other major oil producing allies led by Russia that were implemented at the start of the year.
Saudi Arabia, OPEC’s de-facto leader, and Russia both made promises over the weekend to increase compliance with the deal to cut oil output by 1.2 million barrels per day (bpd) in the first six months of this year, while Saudi oil minister Khalid al-Falih told reporters on Monday that the market is still oversupplied.
“OPEC and its ally Russia are betting that their mantra of production cuts will continue kicking oil prices higher and the market seems to be buying that -- for now,” Investing.com analyst Barani Krishnan commented.
Krishnan noted that many investors expect West Texas Intermediate to breach $60 a barrel “in the coming days” as a first step towards reaching the $80 dollar level that Saudi officials have tagged as the level needed to fund the kingdom’s budget.
Later on Tuesday, the American Petroleum Institute will release its report on crude stockpiles for the week ended March 15 at 4:30PM ET (20:30 GMT), ahead of official government data scheduled for Wednesday. Consensus is looking for a decline of about 0.8 million barrels.
In other energy trading, gasoline futures advanced 0.57% to $1.8935 a gallon by 8:10 AM ET (12:10 GMT), while heating oil rose 1.09% to $1.9905 a gallon.
Lastly, natural gas futures traded up 1.26% to $2.886 per million British thermal unit.