Oil buoyed by Saudi talk of extending output cuts into
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[March 23, 2018]
By Shadia Nasralla
LONDON (Reuters) - Oil prices rose on
Friday after the Saudi energy minister said OPEC would need to keep
coordinating supply cuts with non-member countries including Russia into
Oil's rise defied a slump in global stock markets, which fell in
response to worries about a trade stand-off between the United States
and China. Gold <XAU=>, seen as a safe haven, hit a two-week high.
Brent crude futures <LCOc1> were at $69.10 per barrel at 1136 GMT, up 19
cents but off a session high of $70. For the week, Brent was up about
4.4 percent, its strongest showing since October.
U.S. West Texas Intermediate (WTI) crude futures <CLc1> were at $64.57 a
barrel, up 27 cents but below a session high of $65.42. On the week, WTI
was up about 3.6 percent.
Since January 2017, the Organization of the Petroleum Exporting
Countries as well as a group of non-OPEC countries led by Russia, have
curbed output by 1.8 million barrels per day to counteract surging U.S.
Saudi Energy Minister Khalid al-Falih said OPEC members would need to
continue coordinating with Russia and other non-OPEC oil-producing
countries on supply curbs in 2019 to reduce global oil inventories.
OPEC officials have also said producers could look at a longer period
than five years for developed-country oil stocks averages as a reference
"As the Saudi guessing game for the new rebalancing target begins, Brent
seems well positioned to have another crack at the $70 (a barrel)
level," PVM said in a note.
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A natural gas flare on an oil well pad burns as the sun sets outside
Watford City, North Dakota January 21, 2016. REUTERS/Andrew Cullen
Although analysts said the stand-off between the United States and China could
hit oil markets, for now most said demand looked healthy.
"Geopolitical tensions are coming to the front. But global balances are
relatively tight at the moment. That's enough to amplify relatively small
factors," said Andrew Wilson, head of energy research at BRS Brokers.
Morgan Stanley also cited an expected pick-up in seasonal demand in the coming
"We are only three-four weeks away from peak refinery maintenance, after which
crude and product demand should accelerate ... Global inventories are already at
the bottom end of the five-year range," the U.S. bank said.
"There are sufficient reasons to expect oil prices to strengthen further from
here, and we stick with our (Brent) $75 per barrel call for Q3," Morgan Stanley
Goldman Sachs said in a note this week demand and OPEC cuts pushed their Brent
spot price expectations to $82.50 a barrel by mid-year.
(Additional reporting by Henning Gloystein and Roslan Khasawneh; Editing by Dale
Hudson and Jane Merriman)
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