Oil soars in Asia on Saudi, Russian comments on crude cut extension
Crude oil prices rallied sharply after Saudi Arabia and Russia said they agreed on the need to extend output cuts into March next year and despite weaker than seen China industrial output for April and as North Korea rattled markets with a statement its latest missile test at the weekend was capable of carrying a large nuclear warhead and investors also fretted over the potential spread of cyberattacks that have already hit 200,000 victims in at least 150 countries.
The U.S. West Texas Intermediate crude June contract jumped 1.71% to $48.66 a barrel, while on the ICE Futures Exchange in London, Brent oil for July delivery soared 1.59% to $51.65 a barrel. China reported industrial production rose a less than expected 6.5%, missing a 7.5% gain seen with April crude throughput the lowest since September 2016 and crude oil output down 3.7% on year to 15.99 million metric tons.
As well, China said retail sales for April rose 10.&% on year, more than the 10.^% seen, and fixed-asset investment gained 8.9%, below the 9.1% expected.
Ahead the market is looking to the latest market overview from the International Energy agency for the month of April.
Russian Energy Minister Alexander Novak and Saudi energy minister Khalid al-Falah told reporters in Beijing they agreed on the need to seek a longer extension of crude oil output cuts, but did not clarify if that was a certain outcome for a a May 25 meeting in Vienna between OPEC and non-OPEC producers part of the pact such as Russia.
“Judging from the current dynamics in the decline of the oil and oil products inventories, the markets will see such decline in inventories by the end of 2017 – early 2018, which will lead to cuts in inventories to a five-year average,” Novak told Russian media earlier.
Last week, oil futures settled nearly flat on Friday, but still registered the first weekly gain in a month on the likelihood that key crude producers will extend output cuts beyond an agreed-on June deadline when they meet later this month.