Crude prices rallied on Monday after key producer Saudi Arabia said supplies were “plentiful” and warned it would back sustained output reductions, lifting the currencies of oil-producing countries. Brent crude rose 1.5 percent to $73.16 following the remarks from Saudi Arabia’s energy minister, reaching its highest level since late April. “We are not fooled by current prices. We think the market is fragile”, said Khalid al-Falih.
That, in turn, prompted the currencies of oil-led economies to maintain a confident start to the week:
· The Canadian dollar rose 0.3 percent against the dollar to C$1.342.
• The Norwegian krone was up 0.2 percent to 8.77 per dollar, trading near two-month highs.
· Russia’s rouble also climbed 0.2 percent to 64.62 against the greenback.
· The Australian dollar rose as much as 1 percent, but it was further reinforced by an election result that was regarded as market-friendly.
Oil prices have rallied from under $50 a barrel in late December after Opec, Russia and other allied producers agreed to cut production by 1.2m barrels a day since January.
The Saudi comments, delivered last week, came ahead of a convention of oil officials in Jeddah to examine the efficacy of the deal. With the Saudis keen to boost the production cut deal into the second half of this year, in order to bring down inventories. Brent was trading above $73 on Monday morning, while the US benchmark West Texas was up 1.3 percent at $63.57.