SINGAPORE: Oil prices rose on Tuesday in line with firmer financial markets and bolstered by expectations that producer goup Opec and its allies will keep withholding supply. Front-month Brent crude futures, the international benchmark for oil prices, were at $62.71 at 0630 GMT, 42 cents, or 0.7 per cent, above Friday’s close. US West Texas Intermediate (WTI) crude futures were at $53.85 per barrel, 59 cents, or 1.1 per cent, above their last settlement. Prices fell by around 1 per cent in the previous session and crude futures are down by some 20 per cent from their 2019 peaks in late April, dragged lower by a widespread economic downturn that has started to impact oil consumption.
Traders said crude oil futures on Tuesday were pushed up by a broader lift in financial markets after Beijing eased financing rules to stem an economic downturn.
On the production side, Russia said on Monday it might support an extension of supply cuts that have been in place since January, warning oil prices could fall as low as $30 per barrel if producers supply too much crude.
The Organization of the Petroleum Exporting Countries (Opec) and some non-affiliated producers including Russia, known collectively as Opec+, have withheld supplies since the start of the year to prop up prices.
Opec+ is due to meet in late June or early July to decide output policy for the rest of the year.
“Without Opec+ adherence to supply discipline in the deteriorating environment prices would drop to $40 in a heartbeat, which suggests the extension deal is a lock,” said Stephen Innes, managing partner at Vanguard Markets. — Reuters