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Oil prices rebound on Libyan production restraints, signs Russia is adhering to export cuts

Ines Ferré
·Senior Business Reporter
Updated ·2 min read

Crude futures rebounded on Tuesday on signs that Russia is adhering to its promised export cuts while production restraints in Libya buoyed prices.

West Texas Intermediate (CL=F) rose roughly 2% to close at $72.24 per barrel. Brent (BZ=F) futures also increased to settle at $77.59 per barrel.

Protests in Libya continue to keep roughly 300,000 barrels per day off the market following the shutdown of a major oil field last week.

The latest Russian crude export data tracked by Bloomberg shows the OPEC+ member started the year in line with cuts promised.

The possibility the oil consortium's leader, Saudi Arabia, will extend its own cuts of 1 million barrels per day into the first quarter of this year "is now looking more probable," Dennis Kissler, senior vice president at BOK Financial, said on Tuesday.

"That, along with Indian fuel demand rising and China’s increasing refinery capacity, is erasing most of yesterday’s losses," he added.

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On Monday WTI and Brent fell more than 3% after Saudi Aramco cut crude prices to Asia to the lowest levels since late 2021, prompting demand concerns.

Last week's inventory builds in both gasoline and distillate fuels, which includes mainly diesel, have also weighed on crude markets.

The markets have remained skeptical of OPEC+ promises to adhere to deeper production cuts announced in late November. Shortly after the cartel's last meeting of 2023, Angola said it would exit the group over production disputes.

FILE - The logo of the Organization of the Petroleoum Exporting Countries (OPEC) is seen outside of OPEC's headquarters in Vienna, Austria, on March 3, 2022. Angola says it’s leaving the OPEC oil producers cartel, coming after it battled with the group over lower production quotas this year. According to state news agency Angop, the African nation’s oil minister said Thursday that Angola “does not gain anything by remaining in the organization.” (AP Photo/Lisa Leutner, File)
The logo of the Organization of the Petroleoum Exporting Countries (OPEC) is seen outside of OPEC's headquarters in Vienna, Austria, on March 3, 2022. (Lisa Leutner/AP Photo, File) (ASSOCIATED PRESS)

Analysts have noted increased oil production from the US and other countries will increase supply in the markets this year, despite OPEC's cuts.

Bank of America analysts recently lowered their 2024 forecasts to $80 per barrel, down from $90 per barrel as "rising non-OPEC+ supply and fractures within OPEC+ have softened fundamentals."

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.

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