LONDON – Oil prices rose on Friday after an unexpected fall in the monthly U.S. jobless rate and OPEC’s decision to bring forward to Saturday discussions on whether to extend record production cuts.
Brent crude futures were up $2.40, or 6.0%, at $42.39 a barrel as of 1243 GMT. U.S. West Texas Intermediate (WTI) crude futures rose $2.05, or 5.48%, to $39.46 a barrel.The U.S. Labor Department showed a surprise fall in the jobless rate to 13.3% last month from 14.7% in April.
Brent has risen 17% since Friday to reach a three-month high, settling in a range more comfortable for producers like Russia. The contract has more than doubled since it crashed to as low as $15.98 a barrel on April 22.
WTI is up 11% from last Friday’s close, leaving benchmarks on track for a sixth week of gains, lifted by the output cuts and signs of improving fuel demand as countries ease lockdown measures imposed to prevent the spread of the new coronavirus.Russia’s energy ministry said on Friday a video conference of a group of leading oil producers, known as OPEC+, would be held on Saturday.
The market was hopeful that some laggard countries may have agreed to align themselves with the deal.OPEC+ had said they would bring forward the meeting, which had been scheduled for next week, should Iraq and others agree to boost their adherence to existing supply cuts.
“Prices are up with the meeting scheduled for tomorrow. There was lots of confusion … so it looks like they found a way forward,” Olivier Jakob at Petromatrix consultancy said.
Two OPEC+ sources said Saudi Arabia and Russia had agreed to extend the deeper cuts until the end of July but said Riyadh was also pushing to extend them until the end of August. If OPEC+ fails to agree to roll over the current output curbs, that would mean the cut could drop back to 7.7 million bpd from July through December as previously agreed.
Adding support was the first tropical storm of the season in the U.S. Gulf of Mexico. Storm Cristobal is expected to enter the central Gulf this week, an area rich with offshore platforms, and could see landfall along Louisiana’s refinery row on Sunday.U.S. energy companies have already closed some production. “It’s not big, but there will be some shut-ins,” Jakob said.