Oil advanced at the week's open after Saudi Arabia pledged to shave an extra 1 million barrel-a-day from its production in July, taking output to the lowest level in years in an effort to stabilize the market.
West Texas Intermediate jumped almost 5% early in the session before paring gains to trade below $73 a barrel with similar directional moves in the international marker Brent. Saudi Energy Minister Prince Abdulaziz bin Salman said he would do "whatever is necessary to bring stability to this market" following a tense OPEC+ meeting over the weekend.
Oil in New York tumbled 11% last month as demand concerns, especially in China, sapped confidence. Most market watchers including Goldman Sachs Group Inc. had expected OPEC+ to keep output unchanged, and the rest of the 23-nation coalition offered no additional action right now.
The OPEC+ deal came after a long dispute with African members over how their cuts are measured, which delayed the start of the meeting. Next month's additional cut could be extended, but the Saudis will keep the market "in suspense" about whether this will happen, Prince Abdulaziz said.
The minister has repeatedly sigled out bears in the futures markets, warning them to "watch out" in the buildup to Sunday's meeting.
"Saudi Arabia would ideally want prices to be above $80 a barrel," Vandana Hari, the founder of Vanda Insights in Singapore, said on Bloomberg television, referring to Brent. If the health of the global economy falters, the short sellers "will be back in no time," she said.
WTI for July delivery rose $1.67 to $73.41 a barrel as of 9:54 a.m. in London.
Brent for August settlement advanced $1.68 to $77.81.
Source : Bloomberg
