Oil Rebounds to $66 Range; Saudi Supply Curbs Remain
U.S. oil rose to just shy of $66 on Monday, and London Brent crude recovered above $69, after a sell-off of more than $2 at the end of last week, buoyed by news leading exporter Saudi Arabia would keep OPEC supply curbs in place through July.
Some analysts had predicted OPEC would begin easing output restrictions to take advantage of prices hovering around $70, near a nine-month high. The determination of OPEC's biggest producer to maintain discipline undermined those forecasts.
"After helping provide a floor to prices in the early part of this year, OPEC's cuts enhance a rally into the second half," BNP Paribas analyst Eoin O'Callaghan said in a research note.
U.S. light sweet crude and London Brent crude rose , after falling $2.62 on Friday along with other commodities on fears of slower economic growth.
OPEC agreed late last year to cut a total 1.7 million barrels per day (bpd), roughly 6% of supplies. The reduction, combined with low gasoline stocks in top consumer the United States, helped lift oil from around $50 in January.
On Monday, Saudi Arabia told Asian and European lifters supplies would continue at reduced levels in July.
"The decision fits well with the tone assumed by several OPEC members recently, revealing no desire to lift production or to gather ahead of the next official meeting," Barclays Capital analyst Kevin Norrish wrote in a research note.
OPEC's next meeting is due on Sept. 11.
BNP Paribas's O'Callaghan said there was a risk that OPEC was "leaving in place cuts that reflected a more comfortable market balance in the first half of the year."
Worries over Iran's nuclear dispute with the United Nations have been another driving factor for oil prices this year.
Oil's fall on Friday was part of a sell-off sparked by a strengthening dollar and fears of an economic downturn that could undermine demand.
Most Asian stock markets rebounded on Monday.