Moscow: Oil extended three consecutive weekly gains in London as the Organization of Petroleum Exporting Countries (Opec) ministers signaled their confidence that the market can sustain its rebound.

Kuwait’s oil minister Ali Al-Omair said at a conference in Kuwait City on Monday that an oil surplus is smaller than previously estimated. There is a “sense of optimism" about Brent crude prices, which traded at $62 a barrel in London on Tuesday, his Qatari counterpart Mohammed bin Saleh Al Sada said in Doha, Qatar’s capital.

Brent crude is back in a bull market and West Texas Intermediate close to one on signs that supply may be curbed. US drillers idled 519 rigs in the past 10 weeks, a 33% reduction, according to data from Baker Hughes Inc.

The Opec lowered its forecast for an oil-supply increase from countries outside the group, and the International Energy Agency said a faster economic expansion will help demand growth accelerate this year.

“Opec clearly sees what the rest of the market is seeing," Ole Hansen, an analyst at Saxo Bank A/S in Oslo, said by e-mail. “The sharp reduction in the US rig count is a sign that the applied medicine eventually will help the market to get rid of its oversupply."

Brent for April settlement climbed as much as 92 cents to $62.32 a barrel on the London-based ICE Futures Europe exchange. The contract fell 12 cents to $61.40 on Monday. The volume of all futures traded was about 7% above the 100-day average.

WTI for March delivery climbed as much as 91 cents from Friday’s close to $53.69 a barrel in electronic trading on the New York Mercantile Exchange. It was trading at $53.48 at 10:05am in London. The floor session was suspended on Monday for the US Presidents’ Day holiday and transactions will be booked Tuesday for settlement purposes.

Price ‘optimism’

Opec, which supplies about 40% of the world’s oil, on 9 February made the deepest cut in at least six years to its monthly projection for output growth from other producers, predicting the market’s drop means US drillers will pump less than previously anticipated.

“Brent is near $62 and there’s a sense of optimism surrounding this issue," Qatar’s Al Sada said at an annual meeting of Mesaieed Petrochemical Holding Co.

US drillers reduced the number of rigs in service by 84 to 1,056, according to Baker Hughes, an oilfield services company.

Rig counts

The decrease in rig counts isn’t enough to stop production growth, said Goldman Sachs Group Inc. Lower prices may be needed to balance the market because US output could still expand by 600,000 barrels a day in the fourth quarter, compared with a year earlier, the bank said in a note on Monday.

The nation’s oil boom has been driven by a combination of horizontal drilling and hydraulic fracturing, which has unlocked supplies from shale formations including the Permian and Eagle Ford in Texas and the Bakken in North Dakota. Production averaged 9.23 million barrels a day through 6 February, the most in weekly Energy Information Administration records dating back to January 1983.

Winter storm warnings, meaning travel will be hazardous, stretched from eastern Oklahoma to southern New Jersey, including Washington, Baltimore and St. Louis.

Brent has technical resistance at $61.83 a barrel, according to data compiled by Bloomberg. That’s the 23.6% Fibonacci retracement of the slide from a nine-month intraday high of $115.71 in June to January’s low of $45.19. Sell orders tend to be clustered around chart-resistance levels. Bloomberg

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