Stock futures moved higher on Tuesday as crude oil continued to climb, though another controversy from the Trump camp kept markets on edge. The rally driven by Saudi and Russian pledges to extend output cuts lost steam as investors await USA crude inventory data to be released by an industry group on Tuesday and by the government on Wednesday. "These combined volumes could largely offset the benefit of the extended cuts", Goldman Sachs said, keeping its average Brent price forecast for the third quarter at $57 per barrel.
In a statement released by Kuwait Petroleum Corp., Marzouq offered the state's full support after Russian Federation and Saudi Arabia agreed Monday on the need for a rollover of their output cuts by nine months to the end of March next year.
Credit is therefore key, especially when we hear that some 22% of U.S. oil production is funded from the high-yield corporate credit markets and there is little OPEC can do about controlling the pricing methodology here.
Kuwait's oil minister Essam al-Marzouq said today that his country supported the Saudi/Russian initiative.
In its monthly oil market report, the Paris-based group noted Libya has raised oil production to 800,000 barrels a day, the highest point in three years, according to its preliminary data.
The Saudi-Russia announcement on Monday will probably extend a price rebound that began last week, though the rally is "modest" compared with the increase that came after the OPEC cuts were first announced late past year, Goldman Sachs analysts including Damien Courvalin said in a report.
US energy firms have added oil rigs for a 17th week in a row, extending a 12-month drilling recovery that is expected to help boost crude production in the United States to a record high next year.
But for the first quarter as a whole, stocks in industrialised countries rose by 24.1 million barrels and the IEA said preliminary data suggested inventories increased again in April.
Crude sank to a five-month low earlier this month, rattled by concern over increasing USA crude output that has shaken investors' faith in the ability of OPEC to rebalance the market.
"When the two biggest oil producers of the world reach a consensus on the extension of a supply cut, the market will listen", Tamas Varga, analyst at oil broker PVM, said in a report.
Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London rose 25 cents to $52.07 a barrel.
U.S. oil output witnessed a steep growth in the last one year by almost 10% since mid-last year and touched 9.3 million bpd production. And last week, the USA government raised its domestic-production estimates for this year and next.