Oil rose on Tuesday as renewed concerns over tight supply dominated market sentiment after Saudi Arabia warned that OPEC + could cut output to correct a recent oil price decline.
Brent, the global benchmark for two-thirds of the world’s oil, was trading 0.51 percent higher at $96.97 a barrel. West Texas Intermediate, the gauge that tracks US crude, was up 0.62 percent at $90.92 a barrel.
Prince Abdulaziz bin Salman, Saudi Arabia’s energy minister, in an interview with Bloomberg on Monday, said OPEC and its allies “have the commitment … and the means” to deal with volatility in prices and “provide guidance including cutting production at any time and in different forms”.
Prince Abdulaziz bin Salman said in the interview published by the Saudi Press Agency (SPA), that the OPEC+ alliance has experienced a “much more challenging environment in the past” and has emerged stronger and more cohesive than ever. He added that OPEC+ has the “commitment, the flexibility, and the means within the existing mechanisms of the Declaration of Cooperation to deal with such challenges and provide guidance including cutting production at any time and in different forms as repeatedly demonstrated by OPEC in 2020 and 2021.”
The minister explained that the cartel will soon begin working on a new agreement for post-2022. “We are determined to make the new agreement more effective than before. Witnessing this recent harmful volatility disturb the basic functions of the market and undermine the stability of oil markets will only strengthen our resolve,” the Saudi Minister said.
The supergroup, comprising 23 producers including Saudi Arabia and Russia, agreed to increase output by 648,000 barrels per day in July and August.
