CH: Oil Extends Gains, Saudi Minister Sees Market Balance
The energy minister of Saudi Arabia, the world’s top crude exporter, and the secretary general of producer club OPEC agreed that global oil markets were heading towards balance, and that prices reflect this.
Canada’s benchmark index looks set to open higher on Monday, with volumes expected to be thin with USA markets closed for the Fourth of July holiday, as oil prices climbed on positive comments from the Saudi energy minister.
Russian oil output in June rose slightly from the previous month to 10.84 million bpd.
TOKYO/SINGAPORE – Oil futures were steady on Monday following comments from the Saudi energy minister that the market was heading towards balance, although signs of slowing demand in Asia weighed. King Salman noted that as a founding Member of OPEC, Saudi Arabia will continue to render support to the Organization and make necessary sacrifices for the unity and progress of the group.
The recent attacks in the Niger Delta have triggered an upsurge in Nigerian crude output to thirty-year lows, though the Nigerian National Petroleum Corporation last week announced its production was soaring after repairs. “Let’s say, within the next year, most of the people would expect a balance in the market”.
NYMEX crude for August delivery was up 5 cents at US$49.04 a barrel, after closing up 66 cents, or 1.4 per cent, on Friday.
However, analysts at Morgan Stanley said there were also signs that prices could fall again soon, pointing at stalling gasoline demand and more oil from Canada and Nigeria after production problems. “The gap is narrowing as global demand goes up slowly and production is not going up”.
Saudi Arabia retained its position as China’s biggest crude oil supplier in 2015, but its market share fell from 2014.
Moniz said the Saudi minister has made clear his government wants to rely on market forces to set prices instead of quotes.
Calling Saudi Arabia a “major partner” in the Gulf and Middle East, Zhang said China is willing to maintain the sound momentum of high-level exchanges and better synergize the Belt and Road Initiative with Saudi Arabia’s Economic Vision 2030.
