Saudi Energy Minister Khalid al-Falih said the deal would most likely be extended by nine months and no deeper reductions were needed.
SINGAPORE: Oil prices rose on Friday, pushed up by Saudi statements that OPEC and Russian led production curbs that were introduced in 2017 will need to be extended into 2019 in order to tighten the market.
The rise in oil prices defied global stock markets and other commodities, which slumped on the back of worries about a trade stand-off between the United States and China.
U.S. President Donald Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China, while China unveiled plans on Friday to impose tariffs on up to $3 billion of U.S. imports.
U.S. West Texas Intermediate (WTI) crude futures were at $65.09 a barrel at 0045 GMT, up 79 cents, or 1.2 percent, from their previous close.
Brent crude futures were at $69.64 per barrel, up 73 cents, or 1.1 percent.
Traders said the driver for crude futures was a statement by Saudi Arabian Energy Minister Khalid al-Falih, who said on Thursday that OPEC members will need to continue coordinating with Russia and other non-OPEC oil-producing countries on supply curbs in 2019 to reduce global oil inventories.
The Organization of the Petroleum Exporting Countries (OPEC), of which Saudi Arabia is the de-facto leader, as well as a group of non-OPEC countries led by Russia, struck a production supply agreement in January 2017 to remove 1.8 million barrels per day (bpd) from global markets and end a supply glut.
The pact is set to expire at the end of this year, but Saudi Arabia now seems to be pushing for an extension.
"We know for sure that we still have some time to go before we bring inventories down to the level we consider normal and we will identify that by mid-year when we meet in Vienna," Falih told Reuters in an interview in Washington.
"And then we will hopefully by year-end identify the mechanism by which we will work in 2019."
Although analysts said the potential stand-off between the United States and China could also hit oil markets, for now most said demand looked healthy.
Morgan Stanley also cited a pick-up in seasonal demand in the coming month and geopolitical risk as potential supports for oil prices,
"We are only 3-4 weeks away from peak refinery maintenance, after which crude and product demand should accelerate ... Global inventories are already at the bottom end of the five-year range. With the inventory cushion largely gone, oil prices will likely be more sensitive to geopolitical risk factors," the U.S. bank said.
"There are sufficient reasons to expect oil prices to strengthen further from here, and we stick with our (Brent) $75 per barrel call for Q3," Morgan Stanley said. - Reuters
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