Despite another gloomy demand forecast out today, oil prices rose on Friday morning, following reports that OPEC’s kingpin Saudi Arabia is talking to other producers to devise a new strategy to stop the oil price slump.
As of 08:50 a.m. EDT on Friday, WTI Crude was up 1.16 percent at $53.15, and Brent Crude was trading up 1.2 percent at $58.07, after prices had dropped on Wednesday to their lowest levels since January this year. Oil prices have now fallen by more than 20 percent since a recent peak in April, entering a bear market.
On Thursday, reports emerged that Saudi Arabia had approached other members of OPEC to discuss possible steps they can take to arrest a slide in oil prices that have brought them to the lowest in seven months.
The Saudis were also quick to assure the market on Thursday that despite healthy demand in all regions, the world’s top crude oil exporter continues to keep its exports below the 7-million-bpd mark and will do so at least through September. Saudi Arabia will continue to pump below 10 million bpd and export below 7 million bpd of Saudi oil this month and next, a Saudi official told Reuters.
While the market speculates what, if any, could be OPEC’s next moves, outlooks for global oil demand growth are getting gloomier.
The International Energy Agency (IEA) said on Friday that oil demand growth in the first half increased by just 600,000 bpd, with China the sole source of significant growth at 500,000 bpd. This was the lowest global oil demand growth in more than a decade, since the financial crisis in 2008, according to Reuters.
By Tsvetana Paraskova for Oilprice.com
More Top Reads from Oilprice.com:
- Time Is Almost Up For U.S. Shale
- Oil Supply Growth Under Fire From Low Oil Prices
- Japan Is Bargain Hunting As LNG Prices Slump