Crude futures edged higher on Monday, propped up by comments from Saudi Arabia that cooperation between oil producers who have cut production to boost prices would continue beyond 2018.
Strong global economic growth coupled with a drop in U.S. drilling activity and the dollar also supported crude, traders said, while additional Libyan output capped further gains.
Brent crude futures were at $68.69 a barrel at 1008 GMT, up 8 cents from their last close. Brent on Jan. 15 rose to $70.37, its highest since December 2014.
U.S. West Texas Intermediate (WTI) crude futures were at $63.50 a barrel, up 13 cents. WTI climbed to $64.89 on Jan. 16, also its highest since December 2014.
“A weak dollar and the weekend JMMC (oil producers meeting) are supporting prices but the restart of As-Sarah in Libya is serving as a brake on the rally,” said Tamas Varga, analyst at PVM oil brokerage.
Production at Wintershall’s As-Sarah concession in eastern Libya resumed on Sunday and was expected to add 55,000 barrels per day (bpd) by Monday. Libya’s oil production has been fluctuating around 1 million bpd.
Saudi Arabia, the world’s top oil exporter and de-facto leader of the Organization of the Petroleum Exporting Countries, said on Sunday major oil producers agreed 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 Energy Minister Khalid al-Falih said in Oman.
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.
Despite this, the rig count in 2017 and early this year remains much higher than in 2016, resulting in a 16 percent rise in U.S. production since mid-2016, to 9.75 million bpd.
Beyond supplies, strong global economic growth was also supporting oil prices.
“During the last four quarters, the underlying global growth dynamic began to shift … Global growth has become synchronized and accelerated above trend,” U.S. bank Morgan Stanley said over the weekend in a note.
Despite the well-supported market, analysts warned oil had lost some steam since last week.
Bernstein Energy said on Monday that oil inventories might start rising soon due to a slowdown in demand that typically happens at the end of the northern hemisphere winter.