2018.12.1315:14:00UTC+00Oil Futures Settle Sharply Higher As Saudi Plans To Reduce Shipments

Crude oil prices rebounded after early weakness on Thursday, lifted by reports that Saudi Arabia is likely to slash shipments to U.S. refiners.

According to Bloomberg reports, Saudi Aramco, the state-controlled oil giant of Saudi Arabia, has warned U.S. refiners to prepare for a sharp reduction in cargoes in the coming month.

Meanwhile, a report from the International Energy Agency said said that total global oil supply in November fell by 360,000 barrels a day on month, as a result of outages in the North Sea and Canada, as well as a decline in Russian output.

And, the agency kept its oil demand growth forecasts for this year and next unchanged, at 1.3 million barrels a day and 1.4 million barrels a day, respectively.

However, the agency expects a supply deficit in the second quarter of 2019, as against its forecast in November that predicted a surplus for the entire year.

Crude oil futures for January ended up $1.43, or 2.8%, at $52.58 a barrel on the New York Mercantile Exchange.

On Wednesday, crude oil futures ended down $0.50, or 1%, at 51.15 a barrel, well off the session's high of 52.84 a barrel.

Last week, the OPEC and non-OPEC members agreed to cut production by 1.2 million barrels a day starting in January.

With regard to crude inventories in the U.S., the latest data from the Energy Information Administration showed crude oil stockpiles in the U.S. dropped by about 1.21 million barrels in the week ended December 7th, falling for the second successive week after ten successive weeks of increases. The decline, however, was almost three times lower than the expected level.