Global oil prices fell yesterday after top producer Saudi Arabia signalled a likely boost in supply as soon as the third quarter, and world stock markets were mixed over the sudden US move to cancel the summit with North Korea.
Saudi oil minister Khaled al-Faleh said at an economic conference in Russia that a gradual output increase could happen in the second half of the year to prevent any supply shocks, according to the RIA Novosti agency.
Opec and 10 other oil producers agreed at the end of 2016 to cut output by 1.8mn barrels per day to clear a glut that had led to a collapse in prices in 2014.
The deal, which has been extended until the end of 2018, has led to that glut disappearing and prices have recovered from around $30 per barrel to around $80.
The Saudi comments sent oil prices tumbling by over 3%.
Brent Crude fell to $76.43 per barrel and WTI Crude to $68.03 around 1545 GMT.
Russia’s oil tsar Alexander Novak said ministers from the Opec cartel and other members of the production pact would discuss how much to increase production next month.
“If we come to a common opinion that it is necessary” to increase supply it “should probably take place from the third quarter,” Novak said, according to RIA Novosti.
Uncertainties about supplies from Iran and Venezuela have led prices to spike higher in recent weeks, with industry players warning they could jump to $100 per barrel.
In stocks, London and Frankfurt indices finished the week slightly higher at 7,730.28 points and at 12,938.01 points respectively, while Paris was essentially 0.65% up t 12,938.01 points at the close as investors hesitated amid the confusing series of reports on geopolitics.
In New York, the Dow slipped 0.4% in mid-day trading yesterday as falling crude prices dragged energy stocks lower and investors continued to digest the US-North Korea situation and US-China trade.
The EURO STOXX 50 was 0.18% down at 3,515.36 points.
Shortly after the open, President Donald Trump had said the summit with North Korea that he had called off just 24 hours before could go ahead after all as talks with Pyongyang were continuing.
But investors were contending with the possibility that the summit’s cancellation could cause Trump to be more aggressive in trade talks with China.
Asian markets mostly fell yesterday after the news that Trump had abruptly axed next month’s summit with North Korean leader Kim Jong-un.
For its part North Korea declared that it is willing to talk to the United States “at any time”, while China urged both sides to show restraint.
Markets have been jittery this week as the US president had warned in recent days that he could cancel the summit, while also voicing his displeasure at a deal to avert a trade war with China and threatening tariffs on car imports.




Related Story