Oil prices rebound on Saudi supply reassurances

Oil prices rebound on Saudi supply reassurances

Oil prices rebound on Saudi supply reassurances

The EIA figures for crude oil will hardly provide any relief for prices as trade war-related concern about the global economy deepens.

President Donald Trump announced the US withdrawal from the nuclear deal with Iran in May 2018.

Analysts said the fall in crude oil futures was in tune with a weak trend in global market where it slipped on rising fears of a global economic slowdown, fuelled by intensifying tensions between the U.S. and China.

Financial traders have been selling off energy markets on growing concerns about the outlook for the world economy amid the trade war between the United States and China and U.S. threats of tariffs on Mexican imports.

US West Texas Intermediate (WTI) crude futures were at $53.95 per barrel, up $0.45, or 0.84%.

Saudi Energy Minister Khalid al-Falih said on Monday that a consensus was emerging among producers to continue working "to sustain market stability" in the second-half of the year.

The weekly crude oil inventories cycle is complete and supplies are on the rise.

The group plans to decide later this month or in early July whether to continue withholding supply.

Brent crude prices have dropped nearly 20% from their 2018 peak as global supplies tighten following output curbs by OPEC and Russian Federation, as well as a drop in Iranian exports due to United States sanctions and Venezuelan production. "To me, that means drawing down inventories from their now elevated levels", Energy Minister Khalid al-Falih was quoted as saying by the Saudi-owned Arab News newspaper. "China trade war has added further downside risks to already slowing economies".

Sechin's new comments came as Russia's average oil output fell sharply on June 1-3 to 10.87 million barrels per day amid an oil contamination crisis, down from an average 11.11 million bpd in May. "We have previously stated our commitment to do whatever it takes to stabilize markets and we have delivered on those promises". While US production is near record high levels of 12.2 mln bpd, inventories at 476.8 mln bbl are about 4% above the five-year average for this time of the year.

"Unless we see an across-the-board inventory drop, crude and product prices will remain under pressure", said Andrew Lipow, president of Lipow Oil Associates in Houston, noting the oil price gains on Tuesday were triggered by the stock market rally.

Saudi Arabia pumped 9.65 million barrels of oil per day (bpd) in May, a deeper cut than its production target under the global pact to reduce oil supply, a Saudi oil industry source said on Monday.

Latest News