Crude on rise after Saudi price pledge

Crude prices rose as much as 1 per cent yesterday after Saudi Arabia’s pledge to work on price stability offset some worries about the global oil market glut.

Moscow’s vow to continue Syrian air strikes to punish bombers of a Russian jet also heightened geopolitical risk over the Middle East, some traders said.

Earlier in the session, a broader commodities sell-off led by copper and the firmer dollar had weighed on oil.

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Saudi Arabia said in a statement it was ready to work with other oil producing and exporting countries to stabilise prices.

The Saudi remarks came as oil prices barely held above two-and-a-half-month lows, and were greeted with a mix of enthusiasm and scepticism. Despite similar pledges in the past, the Saudis and other big OPEC producers have kept output high to maintain market share, and crude prices have dropped 50 per cent over the past year.

Benchmark Brent futures were up 54 cents, or 1.2 per cent. It rose more than $1 on the Saudi statement, then surrendered those gains before rebounding.

Some remained unconvinced the rebound in oil would last, pointing to the widening discount in nearby WTI versus farther-dated contracts.

Hedge funds and other big speculators in oil have also cut their bullish wagers on WTI to the lowest level since August.

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