Oil prices rebound on Saudi supply reassurances

Oil prices rebounded from last week’s heavy losses on Monday after reassurances over production from top oil exporter Saudi Arabia, the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC).

Saudi Arabia indicated that the group of oil producers, together with Russia, would continue managing global crude supplies to avoid a surplus.

“We will do what is needed to sustain market stability beyond June. To me, that means drawing down inventories from their currently elevated levels,” Energy Minister Khalid al-Falih was quoted as saying by the Saudi-owned Arab News newspaper.

Front-month Brent crude futures were at $62.40 at 1150 GMT, up 41 cents, or 0.66%, above Friday’s close. Prices dropped by more than 3% on Friday, with May recording the biggest monthly loss in six months.

U.S. West Texas Intermediate (WTI) crude futures were at $54.17 per barrel, up 67 cents, or 1.25%.

“Saudi Arabia’s preference for continuing with, or even deepening, the OPEC+ output cut commitment has also provided a lift to prices,” said Abhishek Kumar, head of analytics at Interfax Energy in London.

“Nevertheless, the escalating trade war of the United States with China, the European Union and Mexico will cap price gains in the run-up to the OPEC+ meeting.”

The group’s next meeting is scheduled for late June.