By Jessica Resnick-Ault
NEW YORK (Reuters) - Oil prices rose almost 2 percent on Wednesday after top exporter Saudi Arabia said it would cut crude exports and deliver an even deeper cut to its production, but swelling U.S. crude inventories limited the day's gains.
The increase came despite falling net imports, which dropped to the lowest on record, as domestic crude production remained at peak levels for the fifth straight week.
Brent crude futures settled up $1.19, or 1.9 percent, at $63.61 a barrel. The global benchmark touched a session high of $63.98, but pulled back after the EIA data was released.
U.S. crude futures settled up 80 cents, or 1.5 percent, at $53.90 a barrel, after touching $54.60 earlier in the session.
"This report is bearish," said Phil Flynn an oil analyst at Price Futures Group in Chicago. "The market is holding up because of the outside markets, the hope for a trade deal, and a strong Dow," he said.
On Tuesday, Saudi Energy minister Khalid al-Falih told the Financial Times the kingdom's production will fall below 10 million barrels per day in March, more than half a million below the target it agreed to in a deal between OPEC and its allies, aimed at curbing a global supply overhang.
"It is a well-known fact that the world economy is losing momentum amid a plethora of downside risks including lingering U.S.-China trade tensions and geopolitical uncertainty."
"Oil prices have not increased alarmingly because the market is still working off the surpluses built up in the second half of 2018," the IEA said.
"In quantity terms, in 2019, the U.S. alone will grow its crude oil production by more than Venezuela's current output. In quality terms, it is more complicated. Quality matters."
U.S. crude output is expected to grow by 1.45 million bpd this year and by another 790,000 bpd next year to hit 13 million bpd in 2020, according to the EIA
The growth, led by U.S. shale oil output, has built up global inventories of crude and refined products. Refining margins for gasoline have collapsed.
(For a graphic on Russian, U.S. & Saudi crude oil production, click here https://tmsnrt.rs/2CTwqaq)
(Additional Reporting by Scott DiSavino in New York, Amanda Cooper in London and Henning Gloystein in Singapore; Editing by Marguerita Choy, David Gregorio and Tom Brown)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)