U.S. West Texas Intermediate and international-benchmark crude oil futures are trading sharply higher on Tuesday shortly before the cash market opening on the back of optimism over a potential extension of the OPEC-led production cuts and an unexpected cut in Venezuelan oil exports due to a power outage in the embattled nation.
Brent crude futures were at $66.75 per barrel, up 17 cents, or 0.3 percent. In 2017-2018, India's crude oil imports from Saudi Arabia were 36.8 million tonne, accounting for 16.7 per cent of total imports. The oil cartel and partners agreed to slash production in December, taking 1.2 million barrels per day off the market in order to prevent supply glut and a further slump in crude prices.
Sources recently said the most likely scenario is that the current supply cuts will be extended in June but much depends on the extent of U.S. sanctions on OPEC members Iran and Venezuela.
Despite the gains, markets were somewhat held back after US employment data raised concerns that an economic slowdown in Asia and Europe was spilling into the United States, where growth has so far still been healthy.
"Downward revisions in global growth forecasts by OECD and European Central Bank have capped bullish gains", said Benjamin Lu of Singapore-based brokerage Phillip Futures.
The was one of the major talking points in a meeting between Petroleum Minister Dharmendra Pradhan and his Saudi counterpart and the chairman of Saudi Aramco, Khalid A Al-Falih, in New Delhi on Saturday.
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Saudi Arabia has voluntarily cut its supply by more than the deal requires and in April will keep output "well below" 10 million bpd, the Saudi official said - below the 10.311 million bpd that the kingdom had agreed to pump.
A messy Brexit could affect growth in global oil demand over the next five years, according to the International Energy Agency.
USA crude oil output will rise almost 2.8 million bpd, growing to 13.7 million bpd in 2024 from an average of just under 11 million bpd in 2018, the IEA said, making the United States by far the biggest oil producer in the world.
"We will see what happens by April, if there is any unforeseen disruption somewhere else, but barring this I think we will just be kicking the can forward", Falih said.
Prices were also buoyed by U.S. energy services firm Baker Hughes' latest weekly report showing the number of rigs drilling for new oil production in the United States fell by nine to 834.
"This is the third straight week of decline...after a number of oil producers trimmed their spending outlooks for 2019", ANZ bank said on Monday.