SINGAPORE: Oil prices edged up on Tuesday on signs that producer club OPEC will continue withholding supply this year and as tensions between the United States and Iran escalated.
Brent crude futures, the international benchmark for oil prices, were at $72.07 per barrel at 0033 GMT, up 10 cents, or 0.1 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up by 14 cents, or 0.2 percent, at $63.24 per barrel.
"Oil prices opened higher, after OPEC held onto its production cut deal," said ANZ on Tuesday.
The Organization of the Petroleum Exporting Countries (OPEC), Russia and other non-member producers have been withholding production since the start of the year to prop up the market.
A meeting has been scheduled for June 25-26 to discuss the policy, but the cartel is now considering moving the event to July 3-4, according to OPEC sources on Monday, with its de-facto leader Saudi Arabia signalling a willingness to continue withholding output.
Meanwhile, U.S. President Donald Trump on Monday threatened Iran with "great force" if it attacked U.S. interests in the Middle East. This came after a rocket attack in Iraq's capital Baghdad, which Washington suspects to have been organised by militia with ties to Iran.
ANZ bank said the rising tension in the Middle East meant a "risk premium is reflected in the price" of crude oil. - Reuters
Oil touches multi-week highs as Opec signals it may extend cuts
NEW YORK: Oil prices on Monday rose to multi-week highs before easing later in the session as Opec indicated it was likely to maintain production cuts that have helped boost prices this year, while escalating Middle East tensions provided further support.
U.S. West Texas Intermediate crude futures rose 34 cents to settle at $63.10 a barrel, after hitting $63.81, the highest price since May 1.
Brent crude futures fell 24 cents to settle at $71.97 a barrel, having earlier touched $73.40, their highest since April 26.
Saudi Energy Minister Khalid al-Falih said on Sunday there was consensus among the Organization of the Petroleum Exporting Countries (Opec) and allied oil producers to drive down crude inventories "gently" but he would remain responsive to the needs of what he called a fragile market.
The comments gave an early boost to oil prices on Monday, but futures pared gains throughout the session.
"Nothing substantial has gone out further, so the gain is leaking out of the market," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. "The market doesn't want to get too far ahead of itself.
Opec, Russia and other non-member producers, an alliance known as Opec+, agreed to cut output by 1.2 million barrels per day (bpd) from Jan. 1 for six months to try to prevent inventories from increasing and weakening prices.
A gathering of the so-called Joint Ministerial Monitoring Committee (JMMC) in Saudi Arabia over the weekend did not make any solid recommendations.
OPEC and its allies are due to meet in Vienna on June 25-26 for their next oil policy meeting. However, the group is considering moving the date to July 3-4, two Opec sources said on Monday. The date change has not been officially confirmed, the sources said.
United Arab Emirates Energy Minister Suhail al-Mazrouei earlier told reporters that producers were capable of filling any market gap and that relaxing supply cuts was not the right decision.
Opec data indicated oil inventories in the developed world rose by 3.3 million barrels month-on-month in March, and were 22.8 million barrels above their five-year average.
Adding to the bullish sentiment were rising tensions in the Middle East.
U.S. President Donald Trump threatened Tehran on Sunday, tweeting that a conflict would be the "official end" of Iran, while Saudi Arabia said it was ready to respond with "all strength" and it was up to Iran to avoid war.
The rhetoric follows last week's attacks on Saudi oil assets and the firing of a rocket on Sunday into Baghdad's heavily fortified "Green Zone" that exploded near the U.S. embassy.
Britain told Iran on Monday not to underestimate the resolve of the United States, warning that if American interests were attacked then the Trump administration would retaliate. - Reuters
We're sorry, this article is unavailable at the moment. If you wish to read this article, kindly contact our Customer Service team at 1-300-88-7827. Thank you for your patience - we're bringing you a new and improved experience soon!
What do you think of this article?