VIENNA: The US is not concerned by moves being considered by OPEC and its allied producers to curb oil production further, US Energy Secretary Dan Brouillette said on Tuesday.
A technical panel that advises the Organization of the Petroleum Exporting Countries and its allies, led by Russia, have proposed an additional output cut of 600,000 barrels per day (bpd), three sources told Reuters last week.
OPEC is meeting next month in Vienna.
The group of producers, known as OPEC+, has already been implementing cuts of 1.2 million bpd since January 2019 to reduce the global supply glut and prop up crude prices.
“We’re not concerned about the decision that OPEC may make and whatever decision they make will be good for them and we appreciate what they’re doing,” Brouillette told reporters on the sidelines of a conference at the UN nuclear watchdog’s headquarters in Vienna.
“They’re going to meet and they’re going to make a determination and a decision that’s best suited for them but I think their ability to impact oil prices in the manner in which they did, you know, three, four, five decades ago is just fundamentally different,” Brouillette said.
Meanwhile, oil rose to $54 a barrel on Tuesday, recovering from a 13-month low as the number of new coronavirus cases slowed in China, easing some concerns about lengthy destruction of oil demand.
Brent crude rose $1.07 to $54.34 a barrel, having dropped on Monday to its lowest since January last year at $53.11. US West Texas Intermediate crude was up 89 cents at $50.46.
“The bottom seems to be in place for oil prices,” said Edward Moya, analyst at brokerage OANDA.
“Optimism is growing that we could see Beijing resume some normalcy in travel and trade outside of the Hubei province.”
Investors remain wary that China’s oil demand could take a further hit if the coronavirus cannot be contained and if OPEC and its allies, known as OPEC+, fail to agree on further steps to support prices.
“Though oil is recovering again today, the lack of any coordinated action by OPEC+ means that oversupply concerns are likely to retain the upper hand,” said Commerzbank analyst Eugen Weinberg.
Oil rose alongside a rally in world equities, which resumed their climb toward record highs on Tuesday on hopes the virus is peaking.