Investing.com - Oil prices bounced on Tuesday, reversing earlier losses on a combination of supportive comments from Saudi Arabia's oil minister and political upheaval in OPEC member Venezuela.
U.S. crude prices added 1.5% to trade at $64.47, up 97 cents from their previous settlement, amid reports that Venezuelan opposition leader Juan Guaido had called on the military to overthrow the government of President Nicolas Maduro.
Prices had already been supported earlier in the day by comments from Saudi Arabia’s Energy Minister Khalid al-Falih indicating that the global deal to coordinate oil production levels could be extended after June.
London traded Brent crude futures climbed 1.4% to $72.48 by 07:46 AM ET (11:46 GMT), up 98 cents from their last close.
Al-Falih told Russian state news agency RIA in an interview that the kingdom will not rush to increase oil supply to replace supplies from Iran due to the U.S. tightening sanctions, and that the kingdom had the space to replace any shortfall in Iranian supplies without breaching the ceiling agreed between OPEC, Russia and others at the end of last year.
He said the existing deal on oil production could be extended to the end of the year.
“We will look at (global oil) inventories - are they higher or lower than the normal level and we will adjust the production level accordingly. Based on what I see now ... I am eager to say that there will be some kind of agreement,” he said.
The Saudi statements appear to defy calls by Trump late last week for OPEC and its de-facto leader Saudi Arabia to raise output to meet the supply shortfall caused by the tightening Iran sanctions.
Bank of America Merrill Lynch said "Iranian oil production will fall to 1.9 million barrels per day in 2H19 from 3.6 million barrels per day in 3Q18 as U.S. sanctions kick in and waivers eventually expire".
Despite this, the bank said it expected "a nearly balanced market in 2019" as output from OPEC and the U.S. will rise.
Prices had been pressured lower earlier after disappointing Chinese manufacturing data dampened hopes that the world’s second largest was regaining momentum. Losses were reversed after slightly better-than-expected growth data from the euro zone.
Despite a shaky global economy, oil prices have surged by almost 40% since January, lifted by supply cuts led by the Middle East-dominated producer club of the Organization of the Petroleum Exporting Countries (OPEC) as well as by U.S. sanctions on producers Iran and Venezuela.
French bank BNP Paribas said it expected oil prices "to rise in the near-term" as crude producers were "over-tightening the market in the face of unplanned supply outages and resilient oil demand".
The bank said it expected crude markets to climb until the third quarter of 2019, adding that prices would then "start to become vulnerable to a sharp rise in U.S. exports of light crude thanks to pipeline and terminal capacity expansion".
U.S. exports exceeded 3 million barrels per day (bpd) for the first time in early 2019, as output rose to a record of more than 12 million bpd.
BNP Paribas said it saw WTI averaging $63 per barrel in 2019, up $2 from its previous forecast, while Brent will average $71 per barrel, up $3 from an earlier estimate.
--Reuters contributed to this report