Oil prices rises as Saudi Arabia signals OPEC deal extension

Oil prices rose on Friday, climbing further from five-month lows hit this week amid signs that Organization of the Petroleum Exporting Countries (OPEC) and other producers may extend their output reduction deal.

Oil prices have taken a bad battering in recent weeks but got some reprieve on Friday,thanks to hints that OPEC and its allies could extend their supply cut pact when they next meet.

Saudi Energy Minister, Khalid Al-Falih in a conference in St Petersburg, Russia, said $60 a barrel was too low to encourage investment in the industry.

“The last couple of years have been good. The last few weeks have not been so good, and going to the June meeting we are seeing a consensus emerging that we need to continue the supply management regime that we established,” Al-Falih added.

A deal by OPEC and other producers, including Russia, to reduce output by 1.2 million barrels per day (bpd) runs out at the end of this month.

“We cannot even talk about prices for tomorrow. The fundamental factors that usually determine the oil prices, the balance of supply and demand, are taking a back seat to news, sanctions, trade wars. It is unpredictable,”
said Russian Energy Minister, Alexander Novak.

Novak said growth in demand, had taken a sharp hit in 2019.

But WTI crude prices perked up by around 50 cents a barrel on al-Falih’s remarks and around 60 cents for Brent to put it just over 62 dollars a barrel.

Oil prices rises amid signs that OPEC & other producers could extend their output reduction dealhttps://t.co/6qzhAoUGM9

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However, demand sentiment remains weak amid fresh signs of a stalling global economy and an intensifying trade war between the United States and China.