Oil rose for a third day after Saudi Arabia’s latest warning to short-sellers suggested OPEC+ could reduce output further to buoy prices.
West Texas Intermediate futures climbed toward $74 a barrel after adding almost two per cent over the previous two days. Saudi Arabian Energy Minister Prince Abdulaziz bin Salman told speculators on Tuesday to “watch out,” just over a week before the Organization of Petroleum Countries and its allies meet to review their output policy for the second half of the year.
“Hard-hitting talk from the OPEC kingpin” is dominating the market, said Stephen Brennock, an analyst at PVM Oil Associates Ltd. “The producer group might have another surprise cut up its sleeve.”
That offset a lack of progress in resolving an impasse over the US debt ceiling, which is weighing on broader financial markets and has influenced oil futures in recent days. House Speaker Kevin McCarthy said late Tuesday the two parties had yet to reach a deal to avert a first-ever default.
The oil market also received bullish impetus from an American Petroleum Institute report showing US nationwide crude inventories declined by 6.8 million barrels last week. If confirmed by government figures later Wednesday, it would be the biggest drop since late March.
Oil is still down for the year as traders grapple with China’s lackluster post-Covid economic recovery, interest-rate hikes from the US Federal Reserve and the US debt conundrum. Russian exports have also remained robust, despite sanctions.
- WTI for July delivery rose 1.4 per cent to $73.92 a barrel at 9:46 a.m. in London.
- Brent for the same month gained 1.2 per cent to $77.76.
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