(Bloomberg) -- Brent oil extended gains as Saudi Arabia expressed hope that OPEC and its allies will agree to extend production cuts into the second half at a meeting that will probably take place early next month.
Futures rose 0.6% in London after climbing 3.4% in the past two sessions. The OPEC+ coalition will probably meet in “the first week of July and that will secure the rebalancing the market as we strive for it,” Saudi Energy Minister Khalid Al-Falih said Sunday in Japan. Meanwhile, the kingdom’s crown prince joined with the U.S. to blame Iran for the latest attacks on tankers near the Strait of Hormuz, according to an interview with Asharq Al Awsat newspaper.
Oil rallied off its lows last week as the attacks on two tankers in the Gulf of Oman raised concern that crude flows may be disrupted from the Middle East. While OPEC+ appears to be progressing closer to a deal to extend cuts, swelling American stockpiles and a deepening trade war between the U.S. and China continues to dent the outlook for demand.
“With the U.S. administration pointing the finger at Iran for the recent tanker attacks, the risk of further supply disruption remains elevated and should support oil prices,” said Stephen Innes, managing partner at Vanguard Markets Pte in Singapore. Saudi Arabia’s statement on further cuts should assure some investors that a deal may be near, he said.
Brent for August settlement added 35 cents to $62.36 a barrel as of 10:11 a.m. in Singapore on London’s ICE (NYSE:ICE) Futures Europe Exchange. The contract closed 1.1% higher at $62.01 on Friday, paring a fourth weekly decline.
West Texas Intermediate for July delivery rose 21 cents, or 0.4%, to $52.72 a barrel on the New York Mercantile Exchange. The contract closed 23 cents higher to $52.51 on Friday. The August contract traded at a discount of $9.37 to Brent for the same month, set for the biggest discount since late May.
