Crude oil prices rose Tuesday, following a rally in global stock markets, with Brent crude recovering from a four-month low briefly touched earlier in the session, Kallanish Energy reports.
World stocks jumped after comments from U.S. Federal Reserve Chairman Jerome Powell fed expectations of a cut in interest rates.
Oil’s gains were triggered by the rally in stocks following the Fed chairman’s comments. The Dow Jones Industrial Average finished the day up 512 points, or 2.1% — its best day since Jan. 4.
The Nasdaq closed 2.7% higher, erasing its losses after a steep selloff on Monday driven by worries about tech company regulation. The S&P 500 ended up 2.1%.
Front-month Brent crude futures settled 69 cents higher, at $61.97 a barrel, posting a 1.1% gain on the day. Brent fell as low as $60.21 earlier in the trading session, its weakest since January.
U.S. West Texas Intermediate crude futures rose 23 cents, to $53.48/Bbl, up from a session low of $52.43/Bbl.
The oil market had been negatively impacted earlier in the session by concerns about slowing global growth and comments from Russia’s top oil producer it would oppose extending joint cuts with other Opec+ members through the end of the year.
Oil futures are trading roughly 20% below 2019 peaks reached in late April, with May posting the sharpest monthly declines since November.
To prevent oversupply and prop up the market, Opec+, which includes most members of Opec, plus a number of non-Opec producers led by Russia, has since Jan. 1 of this year, been holding back 1.2 million barrels per day from the market.
The group plans to decide later this month or in early July whether to continue the supply curbs past June 30
Saudi Energy Minister Khalid al-Falih said Monday a consensus was emerging among Opec+ producers to continue working “to sustain market stability” in the second half of the year, Reuters reported.
However, Tuesday, the head of Russian state oil producer Rosneft, Igor Sechin, said Russia should pump as much crude as it wanted, and he would seek compensation from the government if cuts were extended.
This post appeared first on Kallanish Energy News.