Oil prices rebound on signs of output cuts

Brent crude was up 1.3% at $53.65 a barrel, having reached $55, while US oil rose 1.7% to $48.52.

It followed the release of data showing that US demand for leasing oil rigs was slowing, suggesting that producers might be preparing to cut output.

Meanwhile, US giant ExxonMobil reported a 21% fall in quarterly earnings on lower oil and gas production.

Buying opportunity

On Friday, data showed that more than 90 US oil rigs were idled, the largest number to be wound down in a single day since the mid-1980s.

"There were a lot of people on the sidelines waiting for an opportunity to buy," said Bjarne Schieldrop, chief commodity analyst at SEB.

Monday's price rise extended the gains made last week, and boosted oil and gas share prices. Tullow Oil rose almost 7%, while BG Group climbed 5%.

Since last summer, the prices of Brent and UK West Texas Intermediate Crude have fallen from above $100 a barrel.

"Most market observers have been surprised by the scale of the decrease, and expectations of US oil output this year will no doubt be lowered accordingly," analysts at Commerzbank said in a research note.

"The foundation for a steady price recovery in the second half of the year has thus been laid."

Meanwhile, Exxon, the world's largest publicly traded oil company, saw profit in the fourth quarter fall to $6.57bn (£4.37bn), from $8.35bn for the same three months the year before.

Oil and natural gas production fell 3.8%, Exxon said.

 

(BBC)