The Address | Benghazi – Libya
NEW YORK – Oil prices steadied on Monday, supported by Saudi Arabia’s comments indicating OPEC and its allies would continue to tighten the crude market following deep losses last week.
Concerns that U.S. tariffs on Mexico would dent crude demand limited gains.
Saudi Arabia signaled that the Organization of the Petroleum Exporting Countries, together with Russia, would continue managing global crude supplies to avoid a surplus.
“We will do what is needed to sustain market stability beyond June. To me, that means drawing down inventories from their currently elevated levels,” Energy Minister Khalid al-Falih was quoted as saying by the Saudi-owned Arab News newspaper.
Front-month Brent crude futures gained 1 cent to $62.00 a barrel by 10:38 a.m. GMT (1438 GMT). Prices dropped by more than 3% on Friday, with May recording the biggest monthly loss in six months.
U.S. West Texas Intermediate (WTI) crude futures rose 32 cents to $53.82 a barrel.
“There’s no doubt that Saudi Arabia has shown a lot of frustration with the price of oil,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “They’re scratching their heads, saying, ‘Hey, we think the market has it wrong and to prove that’s the case, we’re going to keep cutting production until the market gets it right.’”
Brent crude prices have dropped almost 20% from their 2018 peak as global supplies tighten following output curbs by OPEC and Russia, as well as a reduction in Iranian and Venezuelan exports due to U.S. sanctions.
Saudi Arabia pumped 9.65 million barrels of oil per day (bpd) in May, a deeper cut than its production target under the global pact to reduce oil supply, a Saudi oil industry source said on Monday. The nation’s output target under the OPEC-led pact is 10.3 million bpd.