Oil prices rise after Saudi says OPEC could cut output

Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma. REUTERS/Nick Oxford/File photo

Oil prices edged up on Tuesday, after Saudi Arabia warned that OPEC could cut output to correct a recent drop in oil futures.

Brent crude futures rose 32 cents to $96.80 a barrel by 0004 GMT, after a choppy session on Monday when they dropped by more than $4 before paring losses to trade near flat.

U.S. West Texas Intermediate crude futures rose 37 cents to $90.73 a barrel by 0004 GMT.

The benchmarks are down about 12 percent and 8 percent this month, respectively.

The Organization of the Petroleum Exporting Countries stands ready to reduce production to correct the recent oil price fall driven by poor futures market liquidity and macro-economic fears, which has ignored extremely tight physical crude supply, OPEC’s leader Saudi Arabia said on Monday.

Saudi state news agency SPA cited Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman as telling Bloomberg that OPEC+ has the means and flexibility to deal with challenges.

Meanwhile, Europe faces fresh disruption to energy supplies due to damage to a pipeline system bringing oil from Kazakhstan through Russia, adding to concerns over a plunge in gas supplies.

Limiting price gains, Iran accused the United States on Monday of procrastinating in efforts to revive Tehran’s 2015 nuclear deal – a charge denied by Washington, which said a deal was closer than two weeks ago because of apparent Iranian flexibility.

In U.S. supply, market participants awaited industry data due out at 4:30 p.m. ET on Tuesday. U.S. crude oil and gasoline stockpiles likely dropped last week, while distillate inventories edged up, a preliminary Reuters poll showed on Monday.