Oil skyrockets 3%, as Saudi signals OPEC output cut extension

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Oil skyrockets 3%, as Saudi signals OPEC output cut extension

On Friday, the 7th of June 2019, crude climbed more than 3 percent after hitting a three-months-low earlier this week following a critical signal of OPEC-kingpin Saudi Arabia that the OPEC (Organization of Petroleum Exporting Countries), a 14-nation pact of oil exporting nations, had been closing in to reach an accord for extending output cut beyond June.

Followed by the reveal of the news, alongside UK and US crude, all energy stocks rallied in alignment with the crude oil prices. On Friday’s (June 7th) market closure, UK crude added 2.6 percent to settle at $63.29 per barrel, while US West Texas Intermediate (WTI) crude futures had wrapped up the 2.7 percent higher at $53.99 a barrel.

Despite Friday’s (June 7th) rally, UK crude had failed to avert its third weekly plunge in a row, falling more than 2 percent this week, while US crude had added just a notch shy of 1 percent this week. None the less, both US and Brent crude benchmarks had hit their lowest levels since January on last Wednesday (June 4th) following reveal of an escalation of US-Mexico trade spat amid an ongoing trade war between US and China, contributing to a sharp global-scale economic slowdown.

In point of fact, Friday's (June 7th) rally began after Saudi Energy Minister, Khalid al-Falih had been quoted saying at a press conference in Russia that the OPEC alongside its allies should extend production cuts beyond June to grapple with an extravagant upsurge of US inventories.