Oil shakes off losses after Saudis hint at action to stabilise crude market

Jessica Morris
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High Oil Prices Continue To Drive Gas Prices Steadily Upwards
The IEA said that the global oil glut has finally disappeared (Source: Getty)

Oil prices jumped today after Saudi Arabia said Opec could take action to stabilise crude markets.

Saudi energy minister Khalid al-Falih said the Organisation of Petroleum Exporting Countries and non-Opec members would discuss the current situation, and whether there was a need to stabilise prices, at an informal meeting on 26-28 September.

Fears that the market recovery is progressing slower than expected has weighed on oil prices recently.

Read more: Oil rout forces Kuwait to hike petrol prices 80 per cent

Brent crude, the global benchmark, reversed earlier losses to rise 3.68 per cent to $45.67 this afternoon. Its US counterpart West Texas Intermediate crude rose 3.60 per cent to $43.21.

Oil fell into the red earlier today after the International Energy Agency said it expects global oil demand next year to fall by 100,000 barrels per day to 1.2m barrels. It cited a dimmer economic outlook following the Brexit vote.

"Some momentum will be lost in 2017 due to downgrades in economic growth projections, but the forecast expansion of 1.2m barrels per day is still above-trend," it said in its monthly oil market report released today.

Read more: Fitch warns European oil majors unlikely to break even this year

But the IEA added that the global oversupply which has haunted oil markets for the last two years has finally disappeared.

"Over balances show essentially no oversupply during the second half of the year," it said.

"Moreover, our crude oil balance indicates a hefty draw in the third quarter of 2016 after a lengthy stretch of uninterrupted builds."

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