At 10:49 am Singapore time (0249 GMT), the new front-month ICE Brent September futures rose by $1.38/b (2.13%) from Friday's settle at $66.12/b, while the front-month NYMEX August light sweet crude futures contract was up $1.21/b cents/b (2.04%) at $59.68/b.Saudi Arabia and Russia have OPEC and its allies poised to extend oil supply cuts for longer than expected into the first quarter of 2020, as the bloc seeks to shore up prices in the face of flagging demand growth ahead.
Ministers from the two largest countries of the producer alliance have endorsed a nine-month extension of the 1.2 million b/d cut accord, which expired over the weekend.
OPEC will meet Monday in Vienna to discuss its options, with any agreement requiring a unanimous vote. Russia and nine other non-OPEC partners will join the talks Tuesday.
"I think it's most likely nine months, but we have to talk to other ministers," Saudi energy minister Khalid al-Falih said on arrival in the Austrian capital early Sunday. "My preference is for nine months."
Russian energy minister Alexander Novak said continuing the cuts through March would take the agreement through winter, when Russia finds it harder to raise output due to harsh weather conditions.
"In the winter period it would be difficult to exit the deal, when demand is falling and in the summer period, demand rises. Therefore, it is most likely, most beneficial, to extend the deal for nine months," Novak said Saturday, according to the Prime news agency.
"Sentiment is likely to be boosted by positive talks between Russian President Putin and Saudi Arabian Crown Prince Mohammed Bin Salman," ANZ analysts said in a note.
This comes at a time when geopolitical tensions and unrest have been on the rise in the Middle East after tankers were attacked and a US drone shot down by Iran.
OPEC members should consult among themselves first on oil policy before striking deals with producers outside the bloc, Iranian oil minister Bijan Zanganeh said Monday, after Saudi Arabia and non-OPEC Russia announced over the weekend they had reached a consensus on extending output cuts.
"Without the unity of OPEC, it is meaningless to plan cooperation between OPEC member states and non-members," Zanganeh said, according to Iran's oil ministry news service Shana. "Iran supports cooperation with oil exporters outside OPEC, but as long as some members of OPEC have tensions against other members, such as Iran, OPEC's understandings with non-OPEC are meaningless and there is no room for cooperation."
Meanwhile, according to media reports, US Special Representative for Iran, Brian Hook, said on Friday, reiterating comments he made last month that the US will sanction any imports of Iranian crude
Leaders of the G20 have reached a consensus on the importance of energy security in the wake of recent concerns about the safety of energy flow in the Middle East, with member countries making efforts to ease tensions in the region.
In light of recent events highlighting concern about safe flow of energy, we acknowledge the importance of global energy security," the leaders said Saturday in their joint declaration, following the end of the G20 Osaka Summit in western Japan.
As of 0249 GMT, the US Dollar Index was up 0.16% at 95.88.
