Oil extends gain on supply cut, weak economy strains outlook

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Oil extends gain on supply cut, weak economy strains outlook

On Monday, the 10th of June 2019, both US and UK crude extended their winning streak, after rising sharply over 3 percent on last Friday (June 7th) over US-Mexico deal on illegal immigrant issues. On Monday’s (June 10th) market, crude rally was almost entirely goaded by a signal of OPEC-kingpin Saudi Arabia, that the club of oil producers including Russia would restrict supply to current level beyond June in order to balance a stormy crude oil market amid an intransigent US inventory rise.

Never the less, despite Monday’s (June 10th) rally traders still remained cautious over the health of a contracting global economy, which had pulled the plug off of a further bull-run of crude oil despite a considerable extent of production cut.

While this report was being prepared, June 10th, GMT. 09.00, UK crude futures were hovering 0.5 percent higher than Friday’s (June 7th) market wrap-up at $63.61 per barrel, while US WTI (West Texas Intermediate) crude futures were up by 0.6 percent at $54.32 a barrel.

Addressing to Saudi energy minister’s comment on OPEC+ output cut, an analyst at futures brokerage at FXTM, Han Tan said, “Brent futures continue rising ... after the Saudi Arabian Energy Minister expressed confidence that OPEC+ producers will prolong their output cuts program through the second half of 2019”.