Oil gains as new Saudi minister signals cuts

Bloomberg

Oil kept up its push higher after Saudi Arabia’s new energy minister signaled that Opec and its allies would continue with output cuts as the group prepared to gather in Abu Dhabi.
Futures in New York added as much as 2.9% after newly-appointed Saudi Energy Minister Prince Abdulaziz bin Salman said there won’t be radical change in the policy of Opec+, which has cut crude production this year to prevent a glut and shore up prices. Meanwhile, the United Arab Emirates energy minister promised a push to get all members committed to curbs, but said there’s no recommendation to make deeper reductions.
“Despite no radical change in oil policy, the developments over the weekend continue to underscore the Kingdom’s commitment to stabilizing markets and pushing prices higher,” said Michael Tran, a commodity strategist at RBC Capital Markets.
Oil capped a second weekly gain on Friday following a decline in US crude stockpiles and efforts from Federal Reserve Chairman Jerome Powell to calm fears of a possible recession. Prices were further supported on Monday by Prince Abdulaziz’s remarks, while a Russian official said his country intends to maintain its critical alliance with Saudi Arabia following the
appointment.
West Texas Intermediate oil for October delivery advanced $1.51 to $58.03 a barrel on the New York Mercantile Exchange as of 11:32 am local time.
Brent for November gained $1.32 to $62.86 a barrel on the ICE Futures Europe Exchange, and traded at a $4.90 premium to WTI for the same month. The global benchmark crude capped a fourth weekly gain
on Friday.
Prince Abdulaziz served as deputy petroleum minister for a dozen years and most recently as minister of state for energy since 2017. He takes charge as the Organization of Petroleum Exporting Countries and its allies, most notably Russia, work to bolster prices at a time when a raging trade war between the US and China weighs on global demand.

The prince said that the trade war has put a “fog” around the oil market, but added that he isn’t too concerned about U.S. shale output.

“While the Saudis remain unwavering in their commitment to higher oil prices, the oil market sentiment continues to be anchored by same re-occurring fears of slowing demand growth, trade wars and a potential looming recession,” Tran said.