Saudi Arabia's representative to OPEC on Thursday said the kingdom's oil exports will be little changed this month, a blow to President Donald Trump, who is depending on his allies in Riyadh to put more barrels on the market to tame fuel prices.
July exports from OPEC's top producer will be roughly in line with last month's total, the Dow Jones reported, citing Saudi OPEC governor Adeeb Al Aama. Meanwhile, Saudi crude oil exports are poised to drop by 100,000 bpd in August compared with July.
Al Aama said Saudi Arabia will not substantially oversupply the market, Dow Jones reported. Saudi exports were about 7.2 million bpd in June, an industry source told Reuters.
Oil prices extended gains following the news, with U.S. benchmark West Texas Intermediate crude last up 92 cents, or 1.3 percent, at $69.68 a barrel.
The commentary from Saudi Arabia could be aimed at preventing oil prices from falling too far too fast, said John Kilduff, founding partner at energy hedge fund Again Capital.
Crude futures fell 7-8 percent from recent highs on the last trading day of June through Wednesday, as the market's concerns about supply shortages eased.
"This sell-off from the highs probably spooked them a little bit, and they're scratching their heads trying to figure out what to do next. They're trying to be a little bit more measured," Kilduff said.
"I don't think they wanted to overshoot to the downside, and that's what this commentary speaks to."
Helima Croft, global head of commodity strategy at RBC Capital Markets, also said the Saudis could be trying to put a floor under international oil prices at $70. Global benchmark Brent crude fell to a three-month low just above $71 a barrel this week.
Trump has called on OPEC to pump more oil as the average cost of gasoline at retail stations remains stuck near $3 a gallon. One of the major factors that pushed oil prices to 3-½-year highs is Trump's decision to restore sanctions on Iran, the world's fifth largest crude producer.
The 15-nation OPEC cartel agreed last month with Russia and several other oil-producing nations to partly reverse their 1½-year-old deal to limit output.