Oil prices gain 1% amid possible lower US output

Oil prices jumped more than 1 percent on Monday on signs that the recent price drop may reduce supply from the US though global economic worries weigh.

International benchmark Brent crude futures were trading up 57 cents, or 1.1 percent, at $54.39 per barrel 8.30am Riyadh time, while the US West Texas Intermediate (WTI) crude futures rose 45 cents, or 1 percent, at $46.04 a barrel.

The price plunge has caused US shale oil producers to curtail drilling plans for next year, according to reports.

“In the short term, it doesn’t seem oil prices would drop further because WTI has broken the $50 resistance level and US President Trump would not want to see WTI falling further to support US shale industry,” Kim Kwang-rae, a commodity analyst at Samsung Futures, told Reuters.

Crude prices bounced back from sharp declines last week, with Brent falling 11 percent for the week, dropping to its lowest since September 2017 last Friday. WTI also fell 11 percent, registering its worst weekly performance since January 2016.