NEW YORK - Oil prices rose on Thursday after Saudi Arabia's OPEC governor said the kingdom's crude exports will fall by about 100,000 barrels per day in August, overshadowing market pressure from a rising dollar and record high U.S. crude production.
Brent crude oil rose 78 cents to $73.68 per barrel by 10:19 a.m. EDT (1419 GMT), reaching a session high of $73.79. U.S. West Texas Intermediate (WTI) <CLc1> was $1.18 higher at $69.94.
Saudi Arabia expects its crude exports to drop by roughly 100,000 bpd in August as the kingdom limits excess production, Saudi Arabia's OPEC Governor Adeeb Al-Aama said in a statement.
He said Saudi Arabia's crude oil exports in July would be roughly equal to June levels. Despite international oil markets being well balanced in the third quarter, he said there would still be substantial stock draws due to robust demand.
“That really turned the momentum of the market around,” said Phil Flynn, analyst at Price Futures Group in Chicago. "It seems like now we're probably going to see more volatility until we get a handle on production."
Crude also strengthened on forecasts that inventories at the U.S. oil delivery hub in Cushing, Oklahoma fell 1.8 million barrels, or 6.2 percent, through Tuesday, traders said, citing energy information provider Genscape.
Prices had fallen earlier in the trading session as a strengthening dollar and talk of supply increases put downward pressure on prices.
The U.S. dollar hit its highest level against a basket of other currencies since July 2017, up half a percent on the day.
Brent has fallen almost 9 percent from last week's high above $79 on emerging evidence of higher production from Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries, as well as Russia and the United States.
The U.S. Energy Information Administration said on Wednesday domestic crude production had reached a record 11 million bpd last week. The U.S. has added nearly 1 million bpd in production since November, thanks to rapid increases in shale drilling.
A sharp jump in U.S. crude oil inventories also added to the bearish tone in the market. They rose 5.8 million barrels last week, compared with a forecast for a decline of 3.6 million barrels.
Meanwhile, OPEC and non-OPEC producers cut oil output in June by 20 percent more than agreed levels, compared with 47 percent in May, two sources familiar with the matter told Reuters on Wednesday.