WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange oil futures nearest delivery and Brent futures on the Intercontinental Exchange ended mostly higher Monday afternoon on reports of steep production declines in Saudi Arabia. In addition, the number of active oil rigs in the United States declined for three straight weeks, according to the industry data.
At the market close, NYMEX April West Texas Intermediate futures were up $0.72 or 1.3% to settle at $56.79 bbl, with ICE May Brent futures $0.84 higher at a $66.58 bbl settlement. NYMEX April ULSD futures settled 0.56cts at $1.9942 gallon, while April RBOB futures surged 2.43cts to settle at $1.8260 gallon after rallying to a $1.8350 4-1/2 month high on the spot continuous chart.
Oil futures were boosted by weekend comments from Saudi Energy Minister Khalid al-Falih who said the kingdom would continue the policy of deep production cuts through April. A Saudi official said the country's March oil output stands at 9.8 million bpd and the kingdom plans to keep April output at the same level.
According to Reuters, Saudi Arabia's oil production fell to 10.136 million in February, down from 10.24 million bpd in January, setting the reduction in March output at a steeper rate of 336,000 bpd.
The official said the Saudis would keep exports below 7 million bpd, and said state-owned oil company Saudi Aramco has turned down 635,000 bpd in customer requests for April deliveries.
While the Saudi energy minister said he was confident about healthy oil demand in 2019, he added it would be too early to change the current policy of Organization of the Petroleum Exporting Countries and allies at the group's next meeting in April. OPEC and its allies will meet in Vienna on April 17-18 and another gathering is scheduled for June 25-26.
On Monday, Venezuela entered the fifth day of the worst-ever power outage in its history that plunged most of the country into darkness and to the verge of social implosion. According to the wire services, Venezuela's state-run PDVSA oil firm was unable to resume exports at the Jose port, the nation's primary crude-export terminal.
The extent of damage to the oil industry due to the blackout remains unclear, but the country's crude oil upgraders, which convert up to 700,000 bpd of Orinoco Belt heavy crude into exportable grades, are already operating at minimum levels. With many fields in the country depending on the grid, their operational capacity has been severely damaged to further erode the collapsing oil industry. Venezuela's February oil production was 1.27 million bpd according to estimates, down from 1.34 million bpd a year ago.
In the United States, the number of active oil rigs plunged by nine last week to 834, the lowest point in 10 months, according to a Baker Hughes report released Friday afternoon. Industry data shows the U.S. oil rig count is down 23 over the past three weeks and 51 since the start of the year, while up 38 against year prior. The combined oil and gas rig count in the United States declined by 11 to 1,027, 43 more than year ago, pointing to more timid output growth going forward in 2019 compared with the explosive increase in 2018.
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