Oil prices soared on Monday morning in Asia after Saudi Arabia’s energy minister announced that OPEC was inclined to maintain its production cuts after the original June deadline in order to reduce inventories gently. “We will be flexible, we are going to do the right thing as we always do,” Khalid al-Falih said over the weekend. OPEC cut production by 1.2 million barrels per day at the start of 2019 and has reconfirmed its commitment to ensuring that inventories edge towards “normal levels” even as the United States continues to ramp up production.
Brent crude futures were up 1.33 percent as of 10:35 a.m. HK/SIN to $73.17 per barrel. U.S. WTI futures were up 1.27 percent to $63.56 per barrel. The jump in oil prices on Monday came even after Russian Energy Minister Alexander Novak commented that it is becoming harder for oil-producing countries to make decisions that will stabilize crude prices and that geopolitical tensions, specifically the trade war between the U.S. and China and recently implemented sanctions against Iran, will continue both to pressure markets and concern traders.
“This all tells us that the market is very unstable. And there are many factors that have become bigger and it’s more complicated to take longer-term decisions that are fundamental to the market,” he said.
Currency Movements
On the currency markets, the U.S. dollar index was stable on Monday morning, with the greenback gaining 0.15 percent against the Japanese yen to trade at 110.25. The dollar eased against the British pound, with the sterling surging 0.14 percent to $1.2736. The euro was unchanged against the dollar.