(Bloomberg) -- Oil is poised for a second weekly gain as Saudi Arabia’s oil minister said output curbs should continue in order to spur investment.
Futures in New York are holding above $68 a barrel after climbing above this level this week for the first time since 2014. The results from the OPEC-led output cuts have been impressive, and the group will continue to cooperate in 2019, Saudi Oil Minister Khalid Al-Falih said at the opening of the ministerial meeting in Jeddah, Saudi Arabia, on Friday. A stable market is needed for at least several months before any changes to the supply pact, Russia’s Energy Minister Alexander Novak said.
Crude’s recent rally has been buoyed by concern about supply security in the energy-rich Middle Eastern region as geopolitical tensions simmer, coupled with a decline in global inventories. Russia’s Novak said Friday the remainder of the surplus will dissipate in the coming months and Saudi’s Al-Falih said the drawdown needs to continue.
“It’s been a good run for the oil market this week,” said Jens Pedersen, senior analyst at Danske Bank. “OPEC is likely content with an oil price above $70 a barrel. They probably won’t make a firm decision before the June meeting, but if you know OPEC well, they will float ideas about what will be next.”
West Texas Intermediate for May delivery, which expires Friday, added 19 cents to $68.48 a barrel on the New York Mercantile Exchange at 11:05 a.m. in London, holding this week’s gain at about 1.3 percent.
Brent for June settlement advanced 15 cents to $73.93 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $5.45 premium to June WTI.
Futures for September delivery rose 0.5 percent to 439.9 yuan a barrel on the Shanghai International Energy Exchange. Prices are heading for a weekly gain of 2.3 percent.
Investment in the oil industry is a challenge, Al-Falih said. OPEC and its allies need to seek market confidence in the long term to attract capital, according to the Saudi minister. Ministers don’t plan any specific discussions on changing the level of output curbs to account for declining production in Venezuela, according to Novak.
Other oil-market news and OPEC comments:
- OPEC and its allies haven’t finished the job and the production cuts should continue as planned, United Arab Emirates Oil Minister Suhail Al Mazrouei said in Jeddah.
- Global oil demand growth in the first three months of this year is forecast to reach 2.55 million barrels a day, the strongest year-on-year expansion since 2010, as demand has come in line with its optimistic expectations so far in 2018, according to Goldman Sachs.
- U.S. total petroleum demand reached 20.6 million barrels a day last month, the highest level since 2007, the American Petroleum Institute said in a monthly report.