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Oil Rises as Saudi Arabia Signals OPEC Cuts to Continue

Gasoil News - Published on Wed, 11 Sep 2019

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Reuters reported that oil rose on expectations that Saudi Arabia, the world's largest oil exporter, will continue to support output cuts by OPEC and other producers to prop up prices under new Energy Minister Prince Abdulaziz bin Salman. Prices climbed for a fourth day and were also supported by comments from the United Arab Emirates' energy minister that OPEC and its allies are committed to balancing the crude market. Global benchmark Brent was up 53 cents, or 0.9%, at USD 62.07 a barrel by 0425 GMT, while US West Texas Intermediate was 57 cents, or 1%, higher at USD 57.09 a barrel. Mr Salman, a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries, was named to the position on Sunday, replacing Khalid al-Falih. He is the son of Saudi King Salman and this is the first time the energy portfolio has been handed to a member of the royal family. He helped to negotiate the current agreement between OPEC and non-OPEC countries including Russia, a group known as OPEC+, to cut global crude supply to support prices and balance the market.

A Saudi official said that there would be no shift in Saudi and OPEC policy on the cuts and that Prince Abdulaziz would work to strengthen OPEC and non-OPEC cooperation.

Mr Stephen Innes, Asia Pacific market strategist at Axi Trader, said that "The change at the top doesn't necessarily mean a shift in policy as much as it's being viewed as a move to improve relations within OPEC and with non-OPEC producers in the wake of the latest Russian compliance fissures."

Russia's oil output in August exceeded its quota under the OPEC+ agreements.

Mr Suhail al-Mazrouei, UAE's Minister of Energy and Industry, said that members of OPEC and non-OPEC producers are "committed" to achieving oil market balance. Asked about possible deeper production cuts, the minister told a news conference in Abu Dhabi that he was not concerned about current oil prices, rather the level of oil inventories.

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Posted By : Rabi Wangkhem on Wed, 11 Sep 2019
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