Crude Oil Prices Hit Two-Week High on Saudi Hint of Further Cuts By

© Reuters.

By Geoffrey Smith — Crude oil prices rose on Thursday after Saudi Arabia’s oil ministry raised the prospect of further production cuts if the global economic recovery loses any more momentum.

A meeting to review the so-called ‘OPEC+’ deal on output restraint ended on Thursday as expected without any major change to production policy, but Prince Abdulaziz was quoted by newswires as saying that the bloc could call another impromptu meeting if the situation deteriorated further.

By 11:20 AM ET (1520 GMT), futures were up 2.2% at $41.05 a barrel, their highest in two weeks. The international benchmark futures contract was up 2.7% at $43.35 a barrel, also a two-week high.

U.S. , meanwhile, were up 2.7% at $1.2285 a gallon.

Analysts were skeptical about the sincerity of the Saudi gesture.

“Since Saudi Arabia likely understands that China and other nations in Asia will see increased demand, it’s unlikely to assent to further production slashes at this time,” Ellen Wald, president of Transversal Consulting, wrote in a column for

The oil market has been shaken in recent weeks by signs of global demand weakening that led to both OPEC and the International Energy Agency cutting their forecasts for consumption this year by 300,000 and 400,000 barrels a day, respectively. Chinese demand in particular has slowed after massive imports by independent refiners over the summer led to high stockpiles of refined products.

However, there were more encouraging signs too, as two separate reports showed U.S. inventories falling by more than expected last week, while demand in India, one of the world’s biggest importers, also showed a rare sign of life.

Sales at India’s three biggest fuel retailers climbed 2.2% in the first half of September, the first year-on-year increase in six months, Bloomberg reported earlier Thursday, citing preliminary data from officials with direct knowledge of the matter.


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