SINGAPORE: Oil prices rose on Monday after Saudi Arabia said producer club Opec and Russia should restrict supplies to current levels, while Washington’s withdrawal of a tariff threat against Mexico removed a cloud over the global economy.
However, traders said concerns about the health of the global economy and the impact on fuel demand were still weighing on oil market sentiment.
Front-month Brent crude futures were at $63.61 at 0645 GMT, 32 cents, or 0.5 per cent, above Friday’s close.
US West Texas Intermediate (WTI) crude futures were at $54.32 per barrel, 33 cents, or 0.6 per cent.
Traders said crude prices were rising following statements by Opec’s biggest producer Saudi Arabia on Friday that the group was close to agreeing extending supply cuts. “Brent futures continue rising ... after the Saudi Arabian Energy Minister expressed confidence that Opec+ producers will prolong their output cuts programme through the second half of 2019,” said Han Tan, analyst at futures brokerage FXTM.
The Organization of the Petroleum Exporting Countries (Opec) and some non-members, including Russia, known collectively as “Opec+”, have withheld supplies since the start of the year to prop up prices.
Stephen Innes, managing partner at Vanguard Markets, said stronger stock markets also supported oil futures.
“With the Mexican stalemate averted and no harmful shockwaves from this weekend G-20 meeting ... oil could trade favourably as WTI and Brent will continue to track the broader risk environment high,” Innes said. — Reuters
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