Crude increased gains on Friday on indication from the representatives of Saudi Arabia and Iraq, major producers within the Organization of the Petroleum Exporting Countries, that they would back a proposal to prolong the output caps agreed with the bloc of partners led by Russia to be in force by the end of the month. The kingdom’s Minister of Energy, Industry and Mineral Resources Khalid al-Falih said a plunge in prices like in 2015 won’t be allowed.
Speaking at the St. Petersburg International Economic Forum (SPIEF), he said the recent drop in oil futures was caused by external factors. He seemed to back extending lower quotas until the end of the year and said any decision can be revised appropriately. Saudi Arabia is supplying 0.7 million barrels per day below target, the minister stressed. But he insisted the sustainability of investment requires much higher prices, while Russia’s President Vladimir Putin has expressed satisfaction with a range of $60 to $65 per barrel.
West Texas Intermediate for shipment next month rallied 2% at 90:06 am GMT to $53.64. Brent for delivery in August jumped 1.09% to $62.96 for one barrel after reaching a month-to-date high at $53.64.