Oil prices jump as OPEC signals continued cuts

Oil prices jumped on Monday in Asia after OPEC+ members indicated intentions to maintain production cuts for the rest of the year.

US Crude Oil WTI Futures rose 1.3% to $63.75 by 12:20 AM ET (04:20 GMT). International Brent Oil Futures gained 1.4% to $73.20.

On Sunday, Saudi Energy Minister Khalid Al-Falih said there was consensus among OPEC members to lower crude inventories “gently” but he would remain responsive to the needs of a “fragile market.”

Oil prices have rallied about 40% so far this year, thanks to the supply cuts agreed by OPEC+ members to reduce output by 1.2 million barrels per day until June.

“This second half, our preference is to maintain production management to keep inventories on their way declining gradually, softly but certainly declining toward normal levels,” al-Falih told a news conference after OPEC and other producers met.

Meanwhile, United Arab Emirates (UAE) Energy Minister Suhail al-Mazrouei earlier told reporters relaxing supply cuts was not “the right decision.”

The OPEC will make an official decision on production cuts on June 25.

In other news, US President Donald Trump’s tweets that said “If Iran wants to fight, that will be the official end of Iran” were cited as another catalyst for the buying in oil.

Traders are also paying close attention to the developments in the Sino-US trade war. Last week, oil prices were under some pressure after China’s state-run media expressed impatience over the trade negotiations.

Hopes that the trade war would end soon diminished after the US imposed sanctions on Chinese telecom giant Huawei and made it more difficult for the company to conduct business with US firms.