Oil prices surge on Saudi minister’s talk of ‘possible action’

oil2NEW YORK: Oil prices rose sharply on Thursday after Saudi Arabia’s energy minister said producers may take action to help rebalance global oil markets.

The remarks helped send prices up more than 4 percent in New York, where a barrel of West Texas Intermediate for September delivery closed up $1.78 at $43.49, after having lost more than a dollar the day before.

In London, North Sea Brent for October delivery rose $1.99 to $46.04 a barrel on the Intercontinental Exchange.

Matt Smith of ClipperData said the whipsawing of prices was “crazy.”

Smith said oil prices had dropped Wednesday after Saudi oil production figures showed the country’s output had risen last month to nearly 11 million barrels per day.

But in remarks reported Thursday, Saudi oil minister Khalid al-Falih said an informal meeting of the Organization of the Petroleum Exporting Countries (OPEC) scheduled for next month would be the occasion for producers to discuss “any possible action.”

Saudi Arabia’s offer to take action was “completely at odds with this production data,” Smith told AFP.

James Williams of WTRG Economics said markets were in an “ongoing battle.”

“It’s between reality and possibilities, if you will,” he told AFP. “The reality is the market continues to be oversupplied, with (a) really big increase in Saudi output last month.”