Global oil prices edged higher Tuesday morning after OPEC and its allies agreed to extend their oil supply cuts until March 2020.
The decision, from a meeting in Vienna, was delayed until after the West Texas Intermediate contract had settled for the day in New York.
That means no change in the 1.2 million barrels a day trim to the output from OPEC, Russia and several smaller nations. Saudi Arabia and Russia share the bulk of the cut.
In electronic trading into Asian time on Tuesday WTI was trading just under the New York settlement price – $US58.94 a barrel against $US59.09.
It closed well below the day’s high of $US60.28.
Brent September crude futures traded around $US64.94 in electronic trading at 7.30am Tuesday, Sydney time, after adding 32 cents, or 0.5%, to settle Monday at $US65.06 a barrel. That was down from the intraday high of $US66.75.
Venezuela’s oil minister Manuel Fernandez said Monday OPEC and its allies will extend their production-cut agreement by nine months — to March 2020, while Saudi Energy Minister Khalid al-Falih, group had “enthusiastically came together” to support a charter to formalise their alliance.
Traders said the late announcement and weak global surveys of manufacturing activity for June had led to renewed concern about the strength of energy demand around the world.
The scaling back of the language between Donald Trump, and China and its leaders on trade issues also helped sentiment but with China’s two main surveys of manufacturing now in a contractionary phase (showing a reading of 49.4, less than the 50 line that divides expansion (above 50) from contraction).
A reading of 49.4 shows the economy is still puttering along but at a slowing rate of growth.
