Oil Gains as New Saudi Minister Signals OPEC+ Cuts to Continue

Oil jumped to the highest in more than a month as investors were reassured that OPEC, allies would continue to trim production.

Sheela Tobben

10 Sep 2019, 07:59 PM IST

Oil Gains as New Saudi Minister Signals OPEC+ Cuts to Continue

A worker pours refined oil into a bucket in the village of Wonocolo, East Java, Indonesia. ( Photographer: Dimas Ardian/Bloomberg)

(Bloomberg) -- Oil jumped to the highest in more than a month as investors were reassured that OPEC and its allies would continue to trim production to help balance global oil markets.

Futures in New York advanced 2.4% on Monday after newly-appointed Saudi Energy Minister Prince Abdulaziz bin Salman said there won’t be radical change in the policy of OPEC+. A committee made up of key members from the coalition will meet in Abu Dhabi this week to review progress of their deal to cut crude production. Meanwhile, investors are also focused on whether the U.S. and China will put an end to the trade war when officials meet in October.

“The bulk of the gains was from the Saudi news,” said Phil Streible, senior market strategist for RJO Futures. “But there is also some optimism from any trade agreements from meetings coming up.”

Crude in New York rose for a fourth straight session amid optimism around OPEC policy, with the United Arab Emirates energy minister promising a push to get all members committed to curbs. Meanwhile, Iraq’s oil minister said it was recently obliged to raise oil output due to local demand for electricity and will pump less in the coming months.

“Despite no radical change in oil policy, the developments over the weekend continue to underscore the Kingdom’s commitment to stabilizing markets and pushing prices higher,” said Michael Tran, a commodity strategist at RBC Capital Markets.

West Texas Intermediate oil for October delivery climbed $1.33 to settle at $57.85 a barrel on the New York Mercantile Exchange.

Brent for November gained $1.05 to end the session at $62.59 a barrel on the ICE Futures Europe Exchange, and traded at a $4.86 premium to WTI for the same month.

Prince Abdulaziz served as deputy petroleum minister for a dozen years and most recently as minister of state for energy since 2017. He takes charge as the Organization of Petroleum Exporting Countries and its allies, most notably Russia, work to bolster prices at a time when a raging trade war between the U.S. and China weighs on global demand.

Other oil-market news:
Gasoline futures rose 0.7% to settle at $1.5846 per gallon. The International Energy Agency cut its forecast for global oil-demand growth again, blaming the trade war. It now sees growth this year averaging about 1 million barrels a day, Executive Director Fatih Birol said in Abu Dhabi. That’s about 10% lower than the agency’s previous forecast. Saudi-backed Motiva Enterprises LLC won nearly 3 million barrels of crude from the U.S. government stockpile after the Kingdom cut oil shipments to America to a 32-year low.

Other oil-market news:

Gasoline futures rose 0.7% to settle at $1.5846 per gallon.
The International Energy Agency cut its forecast for global oil-demand growth again, blaming the trade war. It now sees growth this year averaging about 1 million barrels a day, Executive Director Fatih Birol said in Abu Dhabi. That’s about 10% lower than the agency’s previous forecast.
Saudi-backed Motiva Enterprises LLC won nearly 3 million barrels of crude from the U.S. government stockpile after the Kingdom cut oil shipments to America to a 32-year low.

To contact the reporter on this story: Sheela Tobben in New York at vtobben@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Jessica Summers, Catherine Traywick