Oil prices rose on Wednesday, putting crude futures on track for their longest streak of gains since August 2016, as Saudi Arabia was reported to be lobbying OPEC and other producers to extend a production cut beyond the first half of 2017.
Brent crude futures were up 20 cents, or 0.36 percent, at their highest since early March at $56.43 per barrel at 0656 GMT (02:56 a.m. EDT).
If Wednesday’s rise holds, it would mark the seventh straight daily increase. That would beat a six-day bull-run from August 2016, although the price jump then was 17.5 percent versus a 6-percent rise in the current rally.
Saudi Arabia, the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), has told other producers that it wants to extend a coordinated production cut beyond the first half of the year, the Wall Street Journal reported.
OPEC and other producers, including Russia, have pledged to cut output by around 1.8 million barrels per day (bpd) during the first half of 2017 in an effort to rein in oversupply and prop up prices.
While compliance from some participants has been patchy, Saudi Arabia has made significant cuts, with production down 4.5 percent since late 2016, despite a slight increase in March to 9.98 million bpd.
“(The) Saudi Arabian production reduction appears to be ahead of forecast and gave oil a boost,” said Jeffrey Halley of futures brokerage OANDA in Singapore.
Despite this, there are still concerns that oil markets remain bloated and oversupplied.
Fearing a loss of market share, Saudi Arabia is shielding its most important customers in Asia from the cuts, continuing to supply them with all contractual volumes.
And in the United States, both production and inventories are surging.
The Energy Information Administration (EIA) said on Wednesday that U.S. 2018 crude oil output would rise to 9.9 million barrels per day in 2018, from 9.22 million bpd this year.
With demand expected to rise by 340,000 bpd in 2018, that will leave increasing amounts of U.S. oil for exports or to be put into storage.
U.S. commercial crude inventories hit a record 535.5 million barrels this month, although a report on Tuesday by the American Petroleum Institute suggested a dip.
Official U.S. production and inventory data will be published later on Wednesday by the EIA.