SINGAPORE – At present, oil prices rose more than $ 1 per barrel on Monday (01/07/19), after Saudi Arabia, Russia, Iraq supported the extension of reserve cuts for six to nine months ahead of this week’s OPEC meeting.
Next month, Brent crude oil futures for September delivery touched an intraday high of 66.14 dollars per barrel and rose 1.12 dollars, or 1.7 percent, to trade at 65.86 dollars per barrel at 00.52 GMT (07.52 WIB )
Meanwhile, US crude oil futures for August delivery rose $ 1.10, or 1.9%, to trade at $ 59.57 a barrel after reaching a peak of $ 60.10, the highest in more than five weeks.
The Organization of Petroleum Exporting Countries (OPEC) and its allies are likely to extend the reduction of oil reserves by at least the end of 2019, as the main producers on Sunday (30/06/19) support policies aimed at supporting crude oil prices.
OPEC, Russia to other producers, the alliance often known as OPEC +, met July 1-2 to discuss supply cuts. The group has reduced oil production since 2017 to avoid falling prices amid a global economic downturn and soaring US output.
Russian President Vladimir Putin said on Sunday that he had agreed with Saudi Arabia to extend the production reduction of 1.2 million barrels per day (bpd) for six to nine months.
Saudi Energy Minister Khalid al-Falih said the agreement was likely to be extended by nine months and no deeper reduction was needed.
“Although this needs to be ratified by the remaining members of the OPEC + group, this seems to be a fait accompli,” ANZ analysts said on a note.
Oil prices have been under renewed pressure in recent months from rising US reserves and a slowing global economy.
US crude oil output in April rose to a new monthly record of 12.16 million barrels per day, the US Energy Information Administration said in its monthly report on Friday.
Financial markets were supported by the disbursement of US-China relations after leaders of the world’s two largest economies agreed on Saturday to resume trade discussions.
However, analysts remain skeptical that both parties can reach an immediate agreement.
“Until further details appear, we are back to square one,” Alfonso Esparza, senior market analyst at Oanda in Toronto, said in a note.
“The road ahead looks complicated because China demands more equal treatment, and the US encourages the protection of intellectual property.”