Crude oil futures ended sharply higher for a second straight session on Friday, amid signs OPEC members and allies will extend output cuts beyond June.
After plunging to a 5-month low on Wednesday on an unexpected sharp jump in crude inventories and concerns about a likely drop in energy demand, oil prices have regained significant ground in the past couple of sessions.
West Texas Intermediate crude oil futures for July ended up $1.40, or 2.7%, at $53.99 a barrel.
On Thursday, West Texas Intermediate Crude oil futures for July ended up $0.91, or 1.8%, at $52.59 a barrel.
Brent crude oil futures were up 2.7%, at 63.33 a barrel around mid afternoon today.
For the week, WTA crude futures gained about 0.9%.
Saudi Energy Minister Khalid al-Falih said OPEC is close to agreeing to extend an oil supply-cutting agreement beyond June.
Speaking at an economic forum in St Petersburg, Russia, Al-Falih said that perfect stability on the oil market had not been achieved and the market was being influenced by factors outside “our” control.
“I’m hoping it will be an easy decision and that we’ll roll over, but if it’s not, we will be flexible in terms of our position in the kingdom. A return to the price-crash environment of 2014-15 is simply unacceptable,” he added.
Oil prices have risen despite lingering concerns about short term energy demand due to economic slowdown amid trade dispute between the U.S. and China.
The U.S. government’s decision to impose tariffs on Mexican goods from June 10th added to concerns about global growth.
The Trump administration decided to impose a 5% tariff on Mexican goods that come into the U.S. and said the rate would go up gradually if Mexico does not make efforts to halt illegal migration of people into the U.S.
Meanwhile, U.S. and Mexican officials are reportedly in migration talks. Although the Trump administration is said to be moving forward to implement the proposed tariff from Monday, some analysts and participants believe Trump will delay imposing the tariffs for now.
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