Oil rises as Saudi Arabia warn of OPEC production cuts
Oil rose on Tuesday as renewed concerns over tight supplies dominated the market after Saudi Arabia warned that OPEC might cut production to correct the recent oil price drop.
Brent crude fell more than $4 on Monday, but today, rose 42 cents, or 0.4%, to $96.90 a barrel as of 0630 GMT after a volatile session. It rose $1 per barrel during Asian trading hours.
West Texas Intermediate (WTI) crude futures rose 40 cents, or 0.4%, to $90.76 a barrel.
Indicators are down about 12% and 8%, respectively, this month amid fears of a global recession and fuel demand.
OPEC leader Saudi Arabia announced on Monday that the Organization of the Petroleum Exporting Countries is ready to cut production to correct the recent oil price plunge caused by weak futures market liquidity and macro-economic fears ignoring overly tight physical crude supplies.
Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said OPEC+ has the tools and flexibility to meet the challenges.
He added that with Saudi Arabia coming forward to defend prices, the market will have a chance to form long positions, adding that the outcome of the Iran nuclear deal remains great uncertainty.
Iran on Monday accused the United States of delaying efforts to revive Tehran's 2015 nuclear deal. The accusation was dismissed by Washington by saying the deal was closer than two weeks due to its apparent flexibility.
Europe, meanwhile, is facing new energy supply cuts due to damage to a pipeline system that brings oil from Kazakhstan via Russia, raising concerns about a slump in gas supply.
It is also underlined that the US crude oil inventory in the Strategic Petroleum Reserve (SPR) is at its lowest level in more than 35 years.
Market participants are waiting for API industry data to be released today. U.S. crude oil and gasoline stockpiles fell last week, while distillate stocks rose, according to a preliminary survey on Monday.
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