Oil prices rose more than $1 a barrel today, with OPEC and its allies on track to extend supply cuts until at least the end of 2019.
Front-month Brent crude futures touched an intraday high of $66.63 a barrel and were up $1.72, or 2.7%, at $66.46 a barrel in early trade.
US crude futures climbed $1.52, or 2.6%, to $59.99 a barrel, after earlier hitting their highest in over five weeks at $60.13.
Due to a weakening global economy, Iran today joined top producers Saudi Arabia, Iraq and Russia in supporting a policy aimed at propping up the price of crude.
The Organisation of the Petroleum Exporting Countries, Russia and other producers, an alliance known as OPEC+, meet today and tomorrow to discuss supply cuts. The group has been reducing oil output since 2017 to prevent prices from sliding amid a weakening global economy and soaring US output.
Yesterday, Russian President Vladimir Putin said he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day (bpd) by six to nine months.
Saudi Energy Minister Khalid al-Falih said the deal would most likely be extended by nine months and no deeper reductions were needed.
In recent months, Oil prices have come under renewed pressure from rising US supplies and a slowing global economy. In April, US crude oil output rose to a fresh monthly record of 12.16 million bpd, according to the US Energy Information Administration, even though shale production growth likely peaked last year.
Meanwhile, financial markets were buoyed by a thawing of US-China relations after leaders of the world’s two largest economies agreed on Saturday to restart trade talks.
Citi analysts, however, said they saw the announcements as a temporary truce to de-escalate the trade and tariff war and were sceptical that both sides can reach a deal soon even though 90% of the trade deal has been completed.
“The fact that both sides have not been able to get the remainder of the deal done is difficult to comprehend, suggesting either the timing is not good or some may not want a deal,” they wrote in a note.
Read the full article below: