U.S. oil prices extend gains on compliance with output cuts

Brent futures, the global benchmark, were up 24 cents, or 0.3 percent, at $69.89 a barrel by 0635 GMT.

U.S. West Texas Intermediate (WTI) crude was up 33 cents, or 0.5 percent, at $66.13 a barrel. 

Production by the Organization of the Petroleum Exporting Countries (OPEC) rose in January from an eight-month low as higher output from Nigeria and Saudi Arabia offset a further decline in Venezuela and strong compliance with a supply reduction pact, a Reuters survey showed. [OPEC/O]

OPEC pumped 32.4 million barrels per day (bpd) in January, the survey found, up 100,000 bpd from December. Last month’s total was revised down by 110,000 bpd to the lowest since April 2017.

Even so, adherence by producers included in the deal to curb supply rose to 138 percent from 137 percent in December, the survey found, suggesting commitment is not wavering even as oil prices hit their highest level since 2014.

“It underscores the commitment of the cartel, and their Russian partners, to keep a floor under the oil price,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader. 

That is drawing investors’ focus away from the rise in U.S. production.

U.S. crude output surpassed 10 million bpd in November for the first time since 1970, the Energy Information Administration said this week.