Investing.com - Oil prices headed higher on Monday after Saudi Arabia’s energy minister Khalid al-Falih indicated that a consensus was emerging between OPEC and allies led by Russia over an extension of the output cut agreement.
Falih insisted that the group was near an agreement to extend their deal, which currently expires at the end of this month, to the second half of the year in an effort to rebalance the market, according to a report from Arab News.
Despite some speculation of a delay until July, OPEC is still scheduled to hold its official meeting on June 25 in Vienna, with non-OPEC ministers expected to join the following day.
“We will do what is needed to sustain market stability beyond June. To me, that means drawing down inventories from their currently elevated levels,” Falih was quoted as saying.
Oil prices which had been declining overnight spiked on the news, breaking a four-day losing streak that drove crude to weekly losses of nearly 9%. New York-traded West Texas Intermediate crude futures was last up 66 cents, or 1.2%, at $54.16 a barrel by 7:23 AM ET (11:23 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., rose 64 cents, or 1.0%, to $62.63.
Escalating trade tensions between the U.S. and China have pummeled crude prices as investors fear a global recession that would severely hamper demand.
Oil registered its worst monthly performance in six months in May on the back of those concerns, wiping out nearly half of the 2019 rally that was spawned from the production cut agreement began this year along with U.S. sanctions on Iran and Venezuela and several supply disruptions.
In other energy trading, gasoline futures gained 0.2% at $1.7747 a gallon by 7:26 AM ET (11:26 GMT), while heating oil traded up 0.4% at $1.8485 a gallon.
Lastly, natural gas futures traded down 0.7% at $2.437 per million British thermal unit.