Oil jumps after OPEC signals intent to continue output cuts

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Published: May 20, 2019 7:23:22 AM

Oil made a strong start to the week after Saudi Arabia and other OPEC producers signaled their intention to keep oil supplies constrained for the rest of the year, while pledging to prevent any genuine shortages.

Saudi minister Khalid Al-Falih urged the group to “stay the course” on production cuts at a meeting in Jeddah. (AP Photo)Saudi minister Khalid Al-Falih urged the group to “stay the course” on production cuts at a meeting in Jeddah. (AP Photo)

Oil made a strong start to the week after Saudi Arabia and other OPEC producers signaled their intention to keep oil supplies constrained for the rest of the year, while pledging to prevent any genuine shortages.

Brent futures rose as much as 1.3%, following a 2.3% gain last week. Saudi minister Khalid Al-Falih urged the group to “stay the course” on production cuts at a meeting in Jeddah. Still, Russian Energy Minister Alexander Novak talked about potentially relaxing the curbs and wanted to wait and see what happens in the next month.

Drivers Saudi Arabia isn’t seeing as much demand for oil as expected from Iran’s customers, as a lot of crude has been leaving the Persian nation without being accounted for since the U.S. imposed sanctions on Tehran. Exxon Mobil Corp.’s move to evacuate about 80 of its workers from an oilfield in southern Iraq is “unacceptable and unwarranted” because it has nothing to do with the security situation in southern Iraq, the country’s energy minister said. Algeria is producing oil and natural gas at a steady rate in spite of recent political tumult in the country, its energy minister said. Prices West Texas Intermediate for June delivery rose 61 cents to $63.37 a barrel on the New York Mercantile Exchange as at 8:32 a.m. Sydney time.June WTI ended Friday down 11 cents at $62.76, but rose 1.8% over the week Brent crude for July delivery was up 71 cents, or 1%, at $72.92 on London’s ICE Futures Europe Exchange.

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