Oil prices extended gains after Falih’s remarks, which analysts say indicated that Saudi, OPEC’s largest producer, is anxious that oil prices could fall towards $40 per barrel or lower due to oversupply.
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Oil prices have reached their highest levels in the global market in more than five weeks yesterday, as Brent crude increased to $48.74 per barrel, their highest since July 7.
The rally started last Thursday after Saudi Arabia’s energy minister said the country would work with other oil producers to stabilize prices at a meeting in Algeria next month. The policy has led to the dangerously low prices we are seeing today, and it’s finally looking like OPEC member nations may not be able to sustain these production levels for much longer.
U.S. West Texas Intermediate (WTI) crude futures rose to a high of $44.95 a barrel before dipping to $44.85 a barrel, still up 36 cents from their last close. “While falling United States supply has helped to narrow the surplus, Opec hasn’t helped”.
“These oil summits have usually ended without an agreement, as was the case at an OPEC meeting earlier this year”, said OANDA market analyst Kenny Fisher. The contract climbed $1.25 to $45.74 on Monday, capping the biggest three-day gain since April 12.
Futures rose as much as 0.6 percent in NY after climbing 6.4 percent last week as Saudi Arabia signaled it’s prepared to discuss stabilizing markets at informal OPEC discussions next month.
Iran slashed its September official selling price for light crude to Asia by $1.30 a barrel, the latest sign that exporters are willing to accept discounts in return for market share.
By 3:40am GMT, brent crude oil futures were down 0.67% to reach $48.90 per barrel, while USA crude oil fell 0.45% to settle at $46.37 pb. The kingdom insisted it wouldn’t restrain output without commitments from all OPEC members, including Iran, which has boosted crude production and exports after years of sanctions were lifted in January. Iran’s oil minister Bijan Namdar Zanganeh will meet with Opec, non-Opec ministers at the International Energy Forum, Seda’s Reza Zandi said on Twitter, without saying how he got the information.
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Crude futures hit five-week highs for a second straight day on Tuesday as sources at OPEC spoke of Saudi Arabia’s apparent desire for higher oil prices while Russian Federation met the producer group to discuss the market.
