Oil Extends Gain Near $70 as Saudis Vow Not to Oversupply Market

Oil extended gains near $70 a barrel in New York, paring a third weekly loss, after Saudi Arabia said it will not flood the market with crude.

West Texas Intermediate futures rose 0.4 percent, bringing this week’s decline to 1.8 percent. OPEC’s de facto leader Saudi Arabia, under pressure from U.S. President Donald Trump to pump more and ease prices, said it will keep exports steady this month and reduce it by 100,000 barrels a day in August.

“It seems the Saudis were concerned about the abrupt shift in the market sentiment from bullish to bearish, and they wanted to draw a line in the sand around current levels,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.

Crude has retreated by almost 6 percent this month as a trade war between the U.S. and China rattled global financial markets. The drop has been aided by Libya restoring halted output and the U.S. signaling it may show some flexibility in sanctions on Iranian oil, prompting concern that extra crude promised by Saudi Arabia might not yet be needed.

West Texas Intermediate crude for August delivery, which expires Friday, climbed as much as 1 percent to $70.14 a barrel on the New York Mercantile Exchange and was at $69.74 at 10:13 a.m. in London. Total volume traded was about 32 percent below the 100-day average. The more-active September contract rose 0.3 percent to $68.42.

The U.S. oil benchmark closed above its 50-day moving average on Thursday after slipping below that level earlier this week.

Brent for September settlement added 58 cents to $73.26 on the London-based ICE Futures Europe exchange, after dropping 32 cents on Thursday. The contract is down 2.7 percent this week. The global benchmark traded at a $4.79 premium to WTI for the same month.

Futures for September delivery gained 1.5 percent to 493.4 yuan a barrel on the Shanghai International Energy Exchange, after rising 1.4 percent in the past two sessions.

Saudi Arabia’s pledge to keep its crude exports steady from June to July, and reduce it in August, follows an agreement last month between OPEC and its partners including Russia to boost production by 1 million barrels a day. The kingdom’s assurance clashes with signals it gave out shortly after last month’s OPEC meeting, when people briefed on its output policy said it planned record production of 10.8 million barrels a day.

Oil-market news:

Oil exports from OPEC will decline to 24.38 million barrels a day in the four weeks ending Aug. 4 compared with the period that ended July 7, according to tanker-tracker Oil Movements. Shell is preparing to start the Knarr oil field in Norway after strikes by workers were called off, spokeswoman Kitty Eide said. The field produced about 23,000 barrels a day of crude in April, according to the Norwegian Petroleum Directorate. Gabon’s National Organization of Oil Workers asked members to resume work at Total Gabon SA on Friday following a 11-day strike, according to an emailed statement. Gasoline futures are down 2.1 percent this week to $2.0629 a gallon, heading for a third consecutive weekly drop.