LONDON (June 7): Oil prices jumped more than 2% on Friday, climbing further from five-month lows hit this week amid signs that OPEC and other producers may extend their output reduction deal.
Brent crude futures were up US$1.35 at US$63.02 a barrel by 0757 GMT. US West Texas Intermediate (WTI) crude futures were up US$1.10 at US$53.69 per barrel.
Both grades are heading for their strongest daily rise since late April.
Oil prices ticked up after Saudi Energy Minister Khalid al-Falih told an industry conference in St. Petersburg, Russia, that US$60 a barrel was too low to encourage investment in the industry.
He added he did not want to boost Saudi production to make up for a lower oil price and that a return to the price-crash environment of 2014-15 was simply unacceptable.
A deal by OPEC+ — Organization of the Petroleum Exporting Countries (OPEC) members plus other producers including Russia — to reduce output by 1.2 million barrels per day runs out at the end of the month.
President Vladimir Putin said on Thursday that Russia had differences with OPEC over what constituted a fair oil price but that Moscow would take a joint decision with OPEC members on output at a policy meeting in coming weeks.
Falih said on Friday his country and Russia were aligned on their oil market views. Iraqi Oil Minister Thamer Ghadhban said on Friday that OPEC and its allies were most likely to extend their global oil output deal until the end of the year, RIA news agency reported.
In addition to the OPEC+ cuts, supply has also been limited by US sanctions on oil exports from Iran and Venezuela.
However, demand sentiment remains weak amid fresh signs of a stalling global economy and an intensifying trade war between the United States and China.
Brent is heading for a third week of declines, down more than 2%.
On Wednesday, Brent and WTI hit their lowest marks since mid-January at US$59.45 and US$50.60, respectively, after US crude output reached a record high and stockpiles climbed to their highest since July 2017.
US oil output rose to a record 12.4 million barrels per day (bpd) in the week to May 31, the Energy Information Administration said on Wednesday.
US crude oil inventories surged by 6.8 million barrels over the same week to 483.26 million barrels, their highest levels since July 2017.
Research firm Rystad Energy has raised its forecast for US crude output by 200,000 barrels bpd, to 13.4 million bpd by December.