By Adedapo Adesanya
Prices of Brent crude and the West Texas Intermediate (WTI) turned positive on Thursday, with both gaining around 1 per cent after reports emerged that Saudi Arabia and Russia met to discuss ways to enhance market stability.
While the international crude grade closed at $74.70 a barrel after adding $1.37, the US grade settled at $68.35 per barrel after improving by 74 cents.
It was reported that Saudi Arabia energy minister Prince Abdulaziz bin Salman and Russian deputy prime minister Alexander Novak met in the Saudi capital to discuss the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) group’s efforts to maintain market balance.
Both countries said they remain committed to OPEC+’s decision last October to cut production targets by two million barrels per day until the end of 2023, the reports stated.
Also supporting prices was the ease in worries that followed recent troubles faced by some banks as the Swiss Central Bank agreed to lend Credit Suisse $54 billion after facing its heaviest worries yet.
Secondly, a report emerged from the Wall Street Journal that big banks, including Citigroup, JP Morgan, Goldman Sachs and Wells Farbo, were considering rescue bids for First Republic (FRC) following contagion that has spread after the failures of Silicon Valley Bank (SVB) and Signature Bank.
The US Dollar also weakened on Thursday, making greenback-denominated oil cheaper for holders of foreign currencies and boosting demand.
Both OPEC and the International Energy Agency (IEA) have this week forecast stronger oil demand, but oversupply concerns continue to weigh on the market.
The IEA said commercial oil stocks in developed OECD countries had hit an 18-month high while Russian oil output in February stayed near levels registered before the war in Ukraine, despite sanctions on its seaborne exports.
Pressure came on the commodity after the European Central Bank (ECB) is expected to hike interest rates.
The market has also been watching to see whether the Biden administration would move on oil repurchases to fill the Strategic Petroleum Reserve (SPR). Back in October, the White House said it would repurchase crude when prices were at or below about $67-72 per barrel range.
