The Financial Express

Saudi Arabian King keen on global market stability

Oil set to end multi-week bull run as oversupply concerns resurface

| Updated: October 23, 2017 07:36:46

Evaly and Fianancial Express Evaly and Fianancial Express
Saudi Arabia's King Salman attends a meeting with Russian President Vladimir Putin (not in the picture) in the Kremlin in Moscow, Russia Thursday. 	— Reuters Saudi Arabia's King Salman attends a meeting with Russian President Vladimir Putin (not in the picture) in the Kremlin in Moscow, Russia Thursday. — Reuters

MOSCOW, Oct 6 (Reuters): Saudi King Salman said the kingdom remained keen on the stability of the global oil market in order to balance the interests of consumers and producers, the Saudi news agency reported on Friday.

"Our contribution with our Russian friends was pivotal in reaching an outlook towards rebalancing the global oil markets and we hope that continues," he told businessmen in Moscow on Thursday evening, according to the agency.Russia and Saudi Arabia will continue to work on stabilising world oil markets, Salman told Russian President Vladimir Putin on the first ever visit by a Saudi monarch to Russia on Thursday.

Another report from Amsterdam adds: Oil traded largely unchanged on Friday after a week of profit-taking and the return of oversupply concerns led the market lower, snapping a multi-week bull run that was Brent's longest in 16 months.

Investors were wary of tropical storm Nate shutting down some oil production in the Gulf of Mexico ahead of its expected arrival in the area as a hurricane on Sunday.

"The biggest impact (from Nate) could be on gasoline prices, depending on how many refineries are forced to shut down. But I don't think we will see another bull run," said Frank Schallenberger, head of commodity research at LBBW in Stuttgart.

Global benchmark Brent crude futures LCOc1 were up 7 cents at $57.07 a barrel at 0848 GMT. Week on week, the contract was set for a near 1 per cent loss, snapping a five-week winning streak that was the longest since June 2016.

US West Texas Intermediate (WTI) crude CLc1 was at $50.59, down 20 cents. It was set to close the week down more than 2 per cent, the biggest weekly loss in three months.

In the Gulf of Mexico, BP and Chevron were shutting production at all platforms, while Royal Dutch Shell and Anadarko Petroleum suspended some activity. Exxon Mobil, Statoil and other producers have withdrawn personnel.

The prospect of extended oil production cuts by the Organisation of the Petroleum Exporting Countries and other producers led by Russia had supported prices in recent sessions.

Saudi Arabia's energy minister said on Thursday he was "flexible" regarding Moscow's suggestion a day earlier to prolong the production-curbing pact until the end of 2018.

However, concerns linger about growing US crude exports, incentivised by a hefty WTI discount to Brent prices.

"We have a couple of bearish factors like a new record for US crude exports, the reopening of Libya's biggest oilfield, a new year high in US crude production and the recent strength of the US dollar," Schallenberger said.

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