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After oil prices recorded their worst drop in six months in May, as trade wars slowed economic and global demand growth, the price of oil rose early on the first trading day of June, after Saudi Arabia had taken steps to secure the market. that the Saudis and the wider group of OPEC + would do what is necessary to balance supply and demand.
At 10:53 am EDT on Monday, WTI crude was up 0.62% to $ 53.83, while Brent crude traded up 0.03% to $ 62.01.
Three weeks before OPEC and its allies discuss the fate of their agreement to cut production, Khalid al-Falih, Saudi Arabia's energy minister, de facto head of the OPEC, announced that a consensus was emerging within OPEC + on the group's determination to keep the oil market in balance by reducing inventories.
"And I would like to reiterate my confidence, based on my discussions with several key producers and our background, that we will do what is necessary to maintain the stability of the market beyond June," al-Falih told Arab News in an interview published on Monday.
"For me, this means reducing inventories to their current high levels," said the energy minister of the world's leading oil exporter.
Al-Falih reiterated Saudi Arabia's commitment to "do all that is necessary" to restore global oil balance, but declined to indicate whether the recent fall in price Oil meant that chances are now greater for OPEC and its allies to extend the current agreement until the end of the year. l & # 39; year. Related: It's adapting or dying for US refiners
"First, we are not targeting specific prices. … Prices are determined by the dynamic interaction of multiple forces, some of which are not even fundamental – such as geopolitical headlines and financial speculation, "al-Falih told Arab News, adding that the partners would consider market fundamentals at the end of June. before deciding how to proceed with their oil supply management policies.
"The increase in trade frictions and potential hurdles would certainly have a negative impact on the global economy and the growth in oil demand," al-Falih said.
A few days ago, Russia's first Deputy Minister of Petroleum, Anton Siluanov, said that Russia could join in a proposal to extend the cuts in oil production. The most important question to consider is what would be the oil price gains of an extension compared to the potential loss of market share of US producers, said Siluanov to Reuters last week.
By Tsvetana Paraskova for Oilprice.com
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