Oil rises as Saudi proposes to cut output

The saudis are sending clear signals on their desired price range Mike Wittner, Head of oil market research, Societe Generale SA

LONDON — Oil rose in New York after Saudi Arabia was said to have curbed production, offsetting concerns that the growing trade dispute between the US and China will hurt demand.

“The Saudis are sending clear signals on their desired price range,” said Mike Wittner, head of oil market research at Societe Generale SA.

“When the concern was prices getting too low, they unexpectedly trimmed output.”

Oil suffered its steepest monthly decline in two years in July on concern that US-China friction will slow global economic growth and reduce fuel demand.

As President Donald Trump imposes sanctions on Iran’s crude exports, Saudi Arabia — the world’s biggest crude exporter — has signalled it’s ready to open the taps, but it’s unclear how much extra supply from the kingdom will be needed.

West Texas Intermediate crude for September delivery traded at $68.85 a barrel on the New York Mercantile Exchange, up 356 cents, at 10:31am in London.

The contract slid 47 cents to $68.49 on Friday. Total volume traded was about 48 per cent below the 100-day average.

Brent for October settlement traded at $73.56 a barrel on the London-based ICE Futures Europe exchange, up 35 cents.

The contract declined 24 cents to $73.21 on Friday. The global benchmark crude traded at a $5.83 premium to WTI for the same month. Saudi Arabia reduced oil production to about 10.3 million barrels a day in July, according to delegates in the Organisation of Petroleum Exporting Countries.

The kingdom told the group it had pumped 10.489 million barrels a day in June.

Rhetoric in the US-China trade war ramped up again this weekend, with President Trump saying he has the upper hand, and Beijing responding through state media that it is ready to endure the economic fallout. —