OPEC may Extend Supply Cuts as Oil Prices Remain Firm

OPEC may Extend Supply Cuts as Oil Prices Remain Firm

Oil prices on Tuesday reversed earlier losses after Saudi Arabia said a deal between producers to withhold output that has been in place since January could be extended beyond June to cover all of 2019. The statements by Saudi energy minister Khalid Al-Falih came despite pressure by U.S. President Donald Trump to raise output to

Oil prices on Tuesday reversed earlier losses after Saudi Arabia said a deal between producers to withhold output that has been in place since January could be extended beyond June to cover all of 2019.
The statements by Saudi energy minister Khalid Al-Falih came despite pressure by U.S. President Donald Trump to raise output to make up for a supply shortfall expected from tightening U.S. sanctions against Iran.
Brent crude futures were at $72.25 per barrel at 0701 GMT, up 21 cents, or 0.3 per cent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $63.67 per barrel, up 17 cents, or 0.3 per cent, from their previous settlement.
Prices had come under downward pressure earlier on Tuesday after data on China’s factory activity weighed on financial markets, including crude oil futures, as it suggested Asia’s biggest economy is still struggling to regain traction.
Despite a shaky global economy, oil prices have surged by almost 40 per cent since January, lifted by supply cuts led by the Middle East-dominated producer club of the Organisation of the Petroleum Exporting Countries (OPEC) as well as by U.S. sanctions on producers Iran and Venezuela.
Matt Stanley, a broker with Starfuels in Dubai, said oil prices had risen this year due to the “choking” of supply rather than because of strong demand.
The Saudi statements appear to defy calls by Trump late last week for OPEC and its de-facto leader Saudi Arabia to raise output to meet the supply shortfall caused by the tightening Iran sanctions.

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