An electric pumping unit removes crude oil from a well. (Photographer: Daniel Acker/Bloomberg)

Crude Advances as Saudi Arabia Dismisses Oversupply Speculation

(Bloomberg) -- Crude pushed higher as Saudi Arabia pledged not to flood world markets with oil and the dollar wavered.

Futures ended Thursday’s session 1 percent higher in New York. Saudi Arabia dismissed assertions that it’ll oversupply demand as “without basis” and said it “does not try to push oil into the market beyond its customers’ needs.” Meanwhile, the greenback pared its biggest gain in a week after U.S. President Donald Trump said a strong currency puts the U.S. at a disadvantage.

“The Saudi story is the big story that turned the momentum around,” said Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago. The dollar losing steam combined with WTI’s approaching expiration also provided strength, Flynn said.

Crude Advances as Saudi Arabia Dismisses Oversupply Speculation

Oil has fallen this month as the U.S.-China trade war and the specter of mounting supplies from Saudi Arabia, the U.S. and Libya triggered concern about renewed oversupply. Conversely, Saudi Arabia’s Energy Ministry said on Thursday that the Kingdom will reduce crude exports next month by roughly 100,000 barrels a day and there will be a substantial stockpile decline due to robust demand in the the second half of this year.

“The handful of comments from the Saudis” boosted prices, said Bob Yawger, director of futures at Mizuho Securities USA Inc. in New York. “It’s a strong statement.”

OPEC shipments will decline to 24.38 million barrels a day in the four weeks ending Aug. 4 compared with the period that ended July 7, according to tanker-tracker Oil Movements.

West Texas Intermediate crude for August delivery, which expires Friday, rose 70 cents to settle at $69.46 a barrel on the New York Mercantile Exchange. The more-active September contract advanced 49 cents to end the session at $68.24.

Brent for September settlement slipped 32 cents to end the session $72.58 on the London-based ICE Futures Europe exchange. The global benchmark traded at a $4.34 premium to WTI for the same month.

Oil-market news:

  • Gasoline futures closed little changed at $2.0435 a gallon.
  • Libya’s Waha oil field output was said to have risen to 100,000 barrels a day, according to a person familiar with operations.
  • Analysts and traders were bearish on WTI crude futures, according to a Bloomberg survey.
  • U.S. petroleum demand year-to-date through June rose to its strongest since 2007, averaging 20.2 million barrels a day, the American Petroleum Institute said in its monthly report.

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