Oil prices climbed on Monday, pushed higher by Saudi Arabia’s comment that cooperation between oil producers currently withholding supplies would continue beyond 2018.
Strong global economic growth and a drop in U.S. drilling activity also supported crude oil price, traders said.
Brent crude futures were at $68.89 a barrel at 0315 GMT, up 25 cents, or 0.4 per cent from their last close.
Brent on Jan. 15 rose to 70.51 dollars, its highest since December 2014.
U.S. West Texas Intermediate (WTI) crude futures were at $63.61 a barrel, up 24 cents, or 0.4 per cent, from their last settlement.
WTI climbed to $64.89 on Jan. 16, also its highest since December 2014.
Saudi Arabia, the world’s top oil exporter and de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), said on Sunday that major oil producers were in agreement that they should continue cooperating on production after their deal on supply cuts expires this year.
“There is a readiness to continue cooperation beyond 2018…The mechanism hasn’t been determined yet, but there is a consensus to continue,” Saudi Arabia’s Energy Minister Khalid al-Falih said in Oman.
A group of oil producers including OPEC and Russia, started to withhold production in January last year to prop up prices.
The deal is set to expire at the end of 2018.
In the United States, declining drilling activity for new oil production further supported crude.
U.S. drillers cut five oil rigs in the week to Jan. 19, bringing the count down to 747, energy services firm Baker Hughes said on Friday.
In spite of this, the rig count in 2017 and early this year remains much higher than in 2016, resulting in a 16 per cent rise in U.S. production C-OUT-T-EIA since mid-2016, to 9.75 million barrels per day.
Beyond supplies, strong global economic growth was also supporting oil prices.
In the latest indicator, Japanese manufacturing sentiment in January jumped to an 11-year high, the Media Tankan poll showed on Monday, highlighting the optimism driven by nearly two years of economic expansion.
In spite of the well supported market, analysts warned that oil markets had lost some steam since their peak early last week.