Oil prices rise on OPEC's supply cuts and healthy demand

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Drilling rigs are parked up in the Cromarty Firth near Invergordon, Scotland, Britain January 27, 2015.

The International Energy Agency said United States shale oil will make up 70pc of the extra global crude supply by 2024, eating into the market share of Opec and Russian Federation.

International Brent crude oil futures were at $66.85 a barrel at 0341 GMT, up 18 cents, or 0.3 percent, from their last close.

Since the beginning of the year, both benchmarks have risen about 25 percent.

Crude oil prices are inching higher this week and remain propped up by speculations over a US-China trade agreement, the so-called "Saudi put", tight conditions in the US markets (amidst US net imports in historic low levels and the rising activity in refiners ahead of the summer session), the current OPEC+ agreement to cut oil output and ongoing US sanctions against Iran and Venezuela crude oil exports.

On Jan. 1, OPEC+ began new production cuts to avoid a supply glut that threatened to soften prices.

Offsetting these developments is the surge in US supply, which the International Energy Agency said on Monday will drive global oil supply growth over the next five years.

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Saudi's participation in the Indian Strategic Petroleum Reserve program was discussed at a meeting between the kingdom's Energy Minister Khalid Al-Falih and his Indian counterpart Dharmendra Pradhan in New Delhi on Saturday, according to a government statement on Sunday.

Venezuela's opposition-run congress on Monday declared a "state of alarm" over a five-day power blackout that has crippled the country's oil exports and left millions of citizens scrambling to find food and water.

In the United States, domestic crude production is expected to grow slower than previously anticipated in 2019, averaging about 12.3 million bpd, the U.S. Energy Information Administration (EIA) said.

Markets have been further tightened by the implementation of US sanctions against oil exports from OPEC-members Iran and Venezuela. "The EIA report reined some of that in, and the report was supportive in that respect", said John Kilduff, a partner at Again Capital LLC in NY.

"Ongoing trade disputes between major powers and a disorderly Brexit could lead to a reduction in the rate of growth of global trade and oil demand", the IEA said in its medium-term oil-market report, which covers the period to 2024.

In the near term, upcoming reports on USA inventories are expected to show that crude stocks rose 2.7 million barrels last week.