Oil extended gains from the highest level in almost six weeks as Saudi Arabia’s new energy minister signalled his commitment to production cuts ahead of an OPEC+ meeting later this week.
Futures rose for a fifth day in New York after advancing 2.4% on Monday. Prince Abdulaziz bin Salman, appointed at the weekend after the dismissal of Khalid Al-Falih, said there won’t be any radical change in the kingdom’s oil policy. Key members from the Organization of Petroleum Exporting Countries and its allies meet Thursday in Abu Dhabi to discuss their production pact.
Crude is still down more than 10% from its peak in April as a prolonged U.S.-China trade war dents the outlook for consumption. The International Energy Agency cut its forecast for global oil-demand growth again, blaming the impact of the spat between the world’s two largest economies, while Energy Aspects Ltd. estimates the dispute is depressing prices by $15 a barrel.
Oil prices may remain range-bound in the $50s over the next six months as the global economy shows growing signs of a slowdown due to the trade war, said Tomomichi Akuta, a senior economist at Mitsubishi UFJ Research and Consulting Co. in Tokyo.
West Texas Intermediate oil for October delivery added 39 cents, or 0.7%, to $58.24 a barrel on the New York Mercantile Exchange as of 11:02 a.m. in Singapore. The contract increased $1.33 to $57.85 on Monday, the highest close since July 31.
Brent for November settlement rose 43 cents, or 0.7%, to $63.02 a barrel on the ICE Futures Europe Exchange, climbing for a fifth day. The global benchmark oil traded at a $4.88 premium to WTI for the same month.
“There is nothing radical in Saudi Arabia; we all work for the government, one person comes one person goes,” Prince Abdulaziz told reporters at the World Energy Congress in Abu Dhabi on Monday, his first public comments since he was appointed. The new minister takes charge as OPEC+ seeks to bolster prices at a time when the U.S.-China trade war is sapping oil demand.
Prince Abdulaziz will continue the kingdom’s oil policy where his predecessor left off, OPEC Secretary-General Mohammad Barkindo said on Monday. He is “a bridge builder and an astute diplomat,” Barkindo said.
Other oil-market news:
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.