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Saudi Arabia Signaled It’s OK With Oil at $50 a Barrel

Crude prices have risen over 60% from their low point below $30/barrel earlier this year.Crude prices have risen over 60% from their low point below $30/barrel earlier this year.
Crude prices have risen over 60% from their low point below $30/barrel earlier this year.Photograph by Joe Raedle — Getty Images

Oil prices rose on Monday following comments from the Saudi energy minister that the market was heading towards balance, although signs of slowing demand in Asia weighed.

Brent crude futures were trading at $50.60 per barrel at 0643 GMT, up 25 cents from their last settlement. U.S. crude was up 22 cents at $49.21.

U.S. markets are closed on Monday for the U.S. Independence Day holiday.

“The bulls are seemingly once again on their relentless march to keep this market above $50,” said Matt Stanley of oil brokerage Freight Investor Services in Dubai.

The energy minister of Saudi Arabia, the world’s top crude exporter, and the secretary general of producer club OPEC agreed that global oil markets were heading towards balance, and that prices reflect this.

However, Stanley said there were also signs that prices could fall again soon, pointing at stalling gasoline demand and improving output in Canada and Nigeria.

Attacks in the Niger Delta have pushed Nigerian crude production to 30-year lows, although the Nigerian National Petroleum Corporation said last week that output was rising following repairs.

 

On the other hand, there are signs that U.S. output, after falling sharply over the last year, may now be picking up again. Drillers last week added oil rigs for a fourth week in five, in the best month of producers returning to the well pad since August 2016.

And other big producers too are showing no let up in their pumping: Russian crude output stood at 10.84 million barrels per day (bpd) in June, up from 10.83 bpd in May.

 

Meanwhile in Norway, oil workers signed a deal on Saturday, avoiding a strike that would have cut output from western Europe’s top oil producer by about 6 percent.