Oil rose after Saudi Arabia and other OPEC+ members signaled their intention to keep supplies constrained, while U.S. President Donald Trump ratcheted up tensions with Iran.
Futures in New York jumped as much as 1.7%, before paring some of those gains. Saudi Energy Minister Khalid Al-Falih urged members of OPEC+ gathered in Jeddah to “stay the course” on output cuts. Meanwhile, just weeks after the U.S. tightened sanctions on Iranian crude exports, Trump tweeted: “If Iran wants to fight, that will be the official end of Iran.”
WTI prices rise as OPEC signals intent to continue output cuts
Oil has rallied almost 40% this year as production cuts outweigh demand concerns caused by trade tensions between the U.S. and China. Saudi Arabia and fellow oil producers have to balance their desire to maintain high crude prices with the need to fill any supply gaps caused by rising geopolitical risks and disruptions in Venezuela, Libya and Iran.
“Prices will ultimately need to go higher,” but “OPEC is walking a bit of a tightrope here,” Morgan Stanley analyst Martijn Rats said in a Bloomberg Television interview. “On the one hand, we have some meaningful risks to supply in a number of countries -- Iran, Venezuela, potentially Libya -- but then on the other hand, we also have some demand weakness coming through.”
West Texas Intermediate crude for June delivery rose as much as $1.05 to $63.81 a barrel on the New York Mercantile Exchange, and traded at $62.96 as of 10:36 a.m. London time. The contract added 1.8% last week, the biggest weekly increase since early April.
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