Crude futures rebound as Middle East tensions ease
Published Jun 06, 2017 02:50PM ET
US crude inventories are expected to fall for a ninth-straight week
Investing.com – Crude futures settled higher, as oil ministers assured markets that the diplomatic rift between Qatar and several Arab states would not undermine the global pact to tackle the glut in supply.
On the New York Mercantile Exchange crude futures for July delivery rose 1.7% to settle at $48.19 a barrel, while on London's Intercontinental Exchange, Brent gained 1.17% to trade at $50.05 a barrel.
Crude recovered from session lows to settle higher, after Kuwait oil minister Essam al-Marzouq and Russia Energy Minister Alexander Novak assured markets the supply-cut agreement would not be jeopardised by the recent diplomatic row between Qatar and several Arab states.
Essam al-Marzouq said Qatar was committed to an Opec agreement to restrict supply.
"Qatar is ... committed to the supply cut decision and its compliance ratio ranges between 93 and 102 percent," he said.
On Monday a group of Arab nations, led by Saudi Arabia, severed diplomatic ties with Qatar, accusing it of fuelling terrorism.
Meanwhile, U.S. crude production came into focus, after the U.S. Energy Information Administration on Tuesday, lowered its crude oil price forecast and raised its U.S. production outlook for 2018.
The government agency said it expects West Texas Intermediate prices to average $53.61 a barrel next year, down 2.7% from its previous forecast. For 2017, it raised its WTI forecast by 0.2% to $50.78.
The report comes a day ahead of inventories data expected to show U.S. crude stockpiles fell for a ninth-straight week.
The U.S. Energy Information Administration at 10:30 EDT on Wednesday is expected to show crude stockpiles reduced by 3.5 million barrels.
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Written By: Investing.com
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