RIYADH: Oil rose on Thursday as tighter supply resulting from Saudi Arabia’s pledged production cut and a potential pause to US interest rate hikes offset worries over demand weakness and a global economic slowdown.
Brent crude increase 62 cents, or 0.8 percent, to $77.57 a barrel by 15:17 p.m. Saudi time. US West Texas Intermediate crude gained 68 cents, or 0.9 percent, to $73.21.
Both benchmarks settled up by about 1 percent on Wednesday, supported by Saudi Arabia’s plans for deep output cuts, though price gains remain capped by rising US fuel stocks and weak Chinese export data.
A larger-than-expected build in US fuel inventories reported on Wednesday raised concerns over demand from the world’s top oil consumer, especially as travel was expected to have grown during the Memorial Day weekend.
Saudi crown prince and Russia’s Putin praise OPEC+ cooperation
Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman praised their collaboration during a phone call on Wednesday in a discussion of the work of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, the Kremlin said.
“The topic of ensuring stability on world energy markets was discussed in detail,” according to a Kremlin statement on the Telegram messaging app.
“Both sides praised cooperation within the framework of OPEC+, allowing for the adoption of timely and effective steps to ensure a balance between supply and demand for oil.”
The statement noted the importance of agreements reached at the group’s meeting this week, under which Saudi Arabia will make a deep cut to its output in July on top of a broader OPEC+ deal to limit supply into 2024.
Stricter UAE ship insurance rules to cut oil spill risks
Tougher requirements for some ship insurers covering the UAE ships are aimed at boosting environmental safety amid growing concerns over unregulated shipping, reported the state-run news agency WAM.
The UAE’s energy and infrastructure ministry, in a June 2 circular, announced it would tighten insurance criteria for vessels registered under its flag for insurers that are not part of the leading ship insurers, known as the International Group of Protection and Indemnity Clubs, which cover 90 percent of the world’s ocean-going fleet.
“By prioritizing stringent P&I standards, we ensure the safety, financial security, and environmental stewardship of our maritime activities, attracting reputable investors,” said Hessa Al Malek, adviser to the minister for maritime transport affairs.
The WAM report added that the move would reduce the risk of accidents and oil spills, leading to a safer and more secure marine environment.
(With input from Reuters)