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Crude Oil Prices Higher on Hopes for New Output Cuts

Published 03/05/2018, 03:41 AM
© Reuters.  Crude oil bounces back ahead of Houston meeting
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Investing.com - Crude oil prices were higher on Monday, supported by hopes of fresh output cuts ahead of a meeting between OPEC leaders and U.S. shale producers later in the day.

The U.S. West Texas Intermediate crude April contract was up 51 cents or about 0.83% at $61.76 a barrel by 03:35 a.m. ET (07:35 GMT), off Friday's two-and-a-half week lows of $60.13.

Elsewhere, Brent oil for May delivery on the ICE Futures Exchange in London gained 54 cents or about 0.84% to $64.91 a barrel, after hitting a two-week trough of $63.20 on Thursday.

Oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) and U.S. shale firms were set to gather in Houston for the largest energy industry conference, CERAWeek, which begins on Monday.

Rising U.S. output has weighed on oil prices in recent months amid fears it could dampen global efforts to rid the market of excess supplies.

General Electric (NYSE:GE)'s Baker Hughes unit reported on Friday that U.S. energy companies added 1 oil rig in the week ended March 2, bringing the total count to 800, the highest level since April 2015.

OPEC, along with some non-OPEC members led by Russia, agreed in December to extend oil output cuts until the end of 2018.

The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

Market participants were also still digesting news on Thursday that U.S. President Donald Trump plans to impose tariffs of 25% on imported steel and 10% on aluminum, in a move to “protect U.S. industry”.

The move sparked concerns over a potential trade war, which would have a negative impact on the U.S. economy, sending the greenback broadly lower.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.08% at 90.03, after falling to 89.83 on Friday.

A stronger U.S. dollar often weighs on prices for dollar-denominated commodities.

Elsewhere, gasoline futures were little changed at $1.911 a gallon, while natural gas futures inched up 0.07% to $2.697 per million British thermal units.

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