Mubasher: Oil prices climbed on Monday after having hit their highest levels in weeks, after the Organization of the Petroleum Exporting Countries (OPEC) hinted a consensus on retaining supply restraints in place, while tensions mounted in the Middle East, Reuters reported.
By 7:14 am GMT, US Nymex crude futures surged by 1.34% to $63.60 per barrel (pb), after hitting $63.81 pb, a peak not seen since 1 May, while global benchmark Brent futures climbed by 1.33% to $73.17 pb, after tapping $73.40 pb, its highest level since 26 April.
Saudi Energy Minister Khalid Al Falih on Sunday suggested a consensus among OPEC members and their allies to lower oil stockpiles “gently,” yet voicing the group's readiness to respond to the needs of a “fragile market,” Reuters said.
In the same vein, UAE Energy Minister Suhail Al Mazrouei earlier said that the producer club was capable of filling any market gap, adding that it was not the right decision to relax the supply curbs.
The group members and non-affiliated producers, including Russia, an alliance known as OPEC+, agreed late last year to withhold output by 1.2 million barrels per day (bpd) from last January.
The supply-cutting agreement supported oil markets so far this year.
On the geopolitical level, tensions between Washington and Tehran escalated, with President Donald Trump threatened on Sunday that any conflict would mean the “official end” of Iran.
In addition, Saudi Arabia voiced its readiness to respond with “all strength,” while it is left for Tehran to evade war.
The salvo came after last week’s attacks on Saudi oil pumping stations by armed drones, and the firing of a rocket on Sunday into in the Iraqi capital's heavily fortified “Green Zone.”
“Al-Falih and the UAE both put paid to suggestions of increasing production over the weekend and then President Trump essentially telling Iran to bring it on was a perfect short-term storm for oil prices,” McKenna Macro strategist Greg McKenna told Reuters.
Another bullish indicator for oil prices was the second weekly drop in US drilling operations, as producer slashed 3 oil rigs to 802, as per said by General Electric’s energy service provider Baker Hughes.
