Oil prices surge more than 5 pct on cut pledge, US-China deal
SINGAPORE: Oil prices soared more than five per cent yesterday after Russia and Saudi Arabia renewed a pact to cap output, while the US agreed to halt raising tariffs on Chinese imports, stalling a trade row that many feared could hit demand for the commodity.
Russian President Vladimir Putin said Saturday he and Crown Prince Mohammed bin Salman “have agreed to extend our agreement” to limit production as prices slump on global markets.
An existing deal committing OPEC and non-members to cuts expires this year.
While there was no announcement on how much would be cut and for how long, the pact between the world’s two biggest crude exporters was cheered by oil traders, with Brent jumping US$ 2.82 to US$ 53.75 and West Texas Intermediate up US$ 2.98 at US$ 62.44 on Monday.
“While we still need to know by how much OPEC will curb its production, Putin’s comment does clear a barrier for OPEC in stabilizing prices as Russia has been ambiguous about its stance,” Ahn Yea Ha, a commodities analyst at Kiwoom Securities told Bloomberg News.
Both main contracts have plunged by about a third since hitting four-year highs at the start of October, hit by a number of factors including easing demand, high production, softer-thanexpected US sanctions on Iran and a global growth slowdown. — AFP