Oil gains as Saudi stands by OPEC supply cuts

Oil prices rose on Monday, lifted by comments from Saudi Energy Minister Khalid al-Falih that an end to OPEC-led supply cuts was unlikely before June and a report showing a fall in US drilling activity, reports Reuters.

US West Texas Intermediate (WTI) crude oil futures were at $56.50 per barrel at 0945 GMT GMT, up 43 cents, or 0.77 per cent from their last close.

Brent crude futures were at $66.29 per barrel, up 55 cents, or 0.84 per cent.

Falih told Reuters on Sunday it would be too early to change a production curb pact agreed by the Organization of the Petroleum Exporting Countries and allies including Russia before the group's meeting in June.

"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. Oil markets have been supported this year by ongoing supply cuts by the group called OPEC+, which has pledged to cut 1.2 million barrels per day (bpd) in crude supply since the start of the year to tighten markets and prop up prices.

The group will meet on April 17-18, with another gathering scheduled for June 25-26, to discuss supply policy.

Further underlining the desire of the world's top exporter to drive down prices, a Saudi official said on Monday that the country plans to cut crude oil exports in April to below 7 million barrels per day. Despite the gains, markets were held back after US employment data raised concerns that an economic slowdown in Asia and Europe was spilling into the United States.

However, UBS said in a note that high crude imports by China would soak up excess supply, making for healthy demand which will help support prices.

"We expect the oil market to tighten further in 2Q19, allowing Brent to recover to the USD 70-80/bbl range over the next few months," said UBS analyst Giovanni Staunovo.

Prices were also buoyed by US 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.

Meanwhile, Occidental Petroleum Corp has emerged as one of the biggest exporters of US shale oil, rivaling large trading firms and oil majors, in a market now worth more than $150 million every day.

It is showing no signs of slowing down, with plans to double crude exports to 600,000 barrels per day in 2020, Cynthia Walker, senior vice president midstream and marketing at Occidental, said in an interview. "As we move into the end of this year and early in 2020 ... we'll probably see a doubling of exports over that period of time," she said.

In 2017, Occidental was the largest exporter of crude produced in the Permian oilfield of Texas and New Mexico, the largest US oil field, from the US Gulf Coast.

Through 2018, it remained one of the top three exporters of US crude, according to limited customs data on Refinitiv Eikon analyzed by Reuters and exclusive interviews with company executives and employees.