Oil continued its rebound, heading for the biggest two-day gain since April, as Saudi Arabia and Russia reiterated their commitment to working together to keep the market balanced.
Futures in New York advanced 1.4%, bringing their increase over two days to 3.2% after dropping into a bear market earlier this week. Saudi Arabian Energy Minister Khalid Al-Falih said in St. Petersburg he was sure that OPEC and its partners will prolong supply restraints into the second half of the year. His Russian counterpart, Alexander Novak, said the two countries have agreed to take coordinated action.
“We are convinced that OPEC and Russia will do everything in their power to prevent an oversupply and to ensure higher prices,” said Carsten Fritsch, an analyst at Commerzbank AG.
While oil is staging a slight recovery, it is still heading for a sixth decline in the past seven weeks. The U.S. has ratcheted up trade conflicts with China and Mexico, threatening prospects for the global economy and energy consumption. As prices falter, the coalition of producers known as OPEC+, led by the Saudis and Russia, is expected to agree to press on with output curbs when they meet in coming weeks.
West Texas Intermediate for July settlement rose as much as $1.24 and traded 66 cents higher at $53.25 a barrel on the New York Mercantile Exchange at 8:18 a.m. local time. It slumped to as low as $50.60 earlier in the week and is poised for a weekly loss of 0.4%.
Brent for August settlement gained 1.3% to $62.47 a barrel in London after rising 1.7% on Thursday. It plunged below $60 a barrel on June 5 for the first time since January, and is down 3.2% this week. The global benchmark is trading at a $9.06 premium to WTI.
Despite Saudi Arabia and Russia’s reassurances, trade disputes continue to dominate sentiments in the oil market.
President Donald Trump said he will decide on enacting tariffs on another $325 billion in Chinese imports after meeting with China’s President Xi Jinping at the Group of 20 summit in Japan at the end of the month.
Trade talks between the U.S. and Mexico are set to continue Friday, amid reports that Trump administration officials have considered delaying tariffs to give Mexico time to prepare a solution, according to people familiar with the matter.
© 2019 Bloomberg L.P.