Oil prices rise pushed up by Saudi plans for OPEC and Russian-led production curbs

Oil Stock Markets

Oil prices rose by around 1 percent on Friday, pushed up by Saudi plans for OPEC and Russian-led production curbs introduced in 2017 to be extended into 2019 to further tighten the market. 

 

The rise in oil prices defied global stock markets, which slumped on the back of worries about a trade stand-off between the United States and China. Gold XAU=, seen as a safe haven in times of economic turmoil, rallied to a two-week high on Friday.

U.S. President Donald Trump signed a memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China, while China unveiled plans on Friday to impose tariffs on up to $3 billion of U.S. imports.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $64.95 a barrel at 0753 GMT, up 65 cents, or 1 percent, from their previous settlement.

Brent crude futures LCOc1 were at $69.51 per barrel, up 60 cents, or 0.9 percent. For the week, Brent was set for a gain of about 5 percent, its strongest showing since July last year, while WTI was up about 4.2 percent.

The driver for crude futures was a statement by Saudi Arabian Energy Minister Khalid al-Falih, who said on Thursday that OPEC members will need to continue coordinating with Russia and other non-OPEC oil-producing countries on supply curbs in 2019 to reduce global oil inventories.

The Organization of the Petroleum Exporting Countries (OPEC), of which Saudi Arabia is the de-facto leader, as well as a group of non-OPEC countries led by Russia, struck an agreement in January 2017 to remove 1.8 million barrels per day (bpd) from markets to end oversupply.

Although analysts said the stand-off between the United States and China could hit oil markets, for now most said demand looked healthy.

Morgan Stanley also cited a pick-up in seasonal demand in the coming months and geopolitical risk as potential supports for oil prices.