West Texas Intermediate hits one-week high of more than $66 a barrel

Oil touched a one-week high as traders weighed conflicting supply signals from Saudi Arabia, Russia and Venezuela.

Futures rose above the $66-a-barrel mark in New York on Friday. Oil ministers from Saudi Arabia and Russia are set to talk next week, fuelling speculation that two of the world’s biggest crude exporters may be ready to wind down historic production limits. Meanwhile, Venezuelan oil exports have been crippled as the Latin American nation spirals toward economic collapse.

“We’re going to be subject to incredible headline risk,” said John Kilduff, a partner at hedge Again Capital, a New York-based hedge fund. At the same time, “these stories out of Venezuela about scores of ships waiting to load and the inability to supply their contractual volumes has really underpinned the market here.”

Next week’s discussion between Russian energy minister Alexander Novak and his Saudi counterpart Khalid al-Falih in Moscow may be a prelude to a broader gathering of Opec members and allied producers later this month. The US has appealed to Opec to raise output amid a run-up in domestic gasoline prices, even as American crude output surges.

“After Saudi Arabia and Russia made the suggestion that Opec starts lifting output in the second half, the market has been on its heels,” said Jens Naervig Pedersen, senior analyst at Danske Bank in Copenhagen. “In the end, Opec will make sure to tread carefully.”

West Texas Intermediate for July delivery edged up 16 US cents to $66.11 a barrel at 10.18am on the New York Mercantile Exchange. Total volume traded was about 14% below the 100-day average.

Brent futures for August settlement slid 36c to $76.96 on the London-based ICE Futures Europe exchange. The global benchmark traded at a $10.92 premium to WTI for the same month.

With some members of Opec resisting the Saudi-Russia proposal to ease output caps that have been in place since the start of 2017, attention is also on a Moscow meeting between Russian President Vladimir Putin and Mohammed bin Salman, the powerful Saudi crown prince, at a World Cup soccer match on June 14.

With Stephen Stapczynski, Grant Smith and Heesu Lee

Bloomberg