Oil Closes Week on Rebound as Saudis, Russia Pledge Coordination

Oil ended a tumultuous week on the upswing after Saudi Arabia and Russia reiterated their commitment to averting a global supply glut and U.S. President Donald Trump declared progress in his standoff with Mexico.

Futures in New York gained 2.7% on Friday, just two days after crashing into bear market territory. At a St. Petersburg conference, Saudi Arabian Energy Minister Khalid Al-Falih said he was sure OPEC and its partners will prolong output restraints into the second half of the year. His Russian counterpart, Alexander Novak, said the two countries have agreed to take coordinated action.

“The message is clear: Price-supportive OPEC/non-OPEC supply curbs will stay in place for the foreseeable future,” analysts at London-based PVM Oil Associates Ltd. wrote in a note to clients.

U.S. oil futures fell below $51 a barrel on Wednesday, completing a swoon of more than 20% since late April as the Trump administration’s multiple trade disputes escalated. Yet prices rallied the last two days as U.S. officials negotiated with Mexico, helping West Texas Intermediate crude avoid a third straight weekly decline.

Trump tweeted Friday that there’s a “ good chance” the U.S. will reach an agreement averting new tariffs on Mexico before a Monday deadline. Data from oilfield-services provider Baker Hughes also showed American explorers cut drilling-rig activity to a 15-month low this week.

See also: Texas’s Gas Glut Is So Bad Drillers Are Pumping It Down Wells

West Texas Intermediate for July settlement closed $1.40 higher at $53.99 a barrel on the New York Mercantile Exchange and was up 1% for the week.

Brent for August settlement gained $1.62 to $63.29 a barrel on London’s ICE Futures Europe exchange but was still down 1.9% this week. The global benchmark was trading at a $9.13 premium to WTI for the same month.

With geopolitical crises abounding, WTI’s 30-day volatility has risen to its highest in four months.

“There’s so many uncertainties, it’s hard to make a call on the sustainability of any move,” said Tamar Essner, Nasdaq’s director of energy & utilities. “We could easily swing from a state of surplus to deficit in a not-very-long period of time,”

Other oil-market news Gasoline futures gained 1.8% to $1.7389 a gallon. Most members of the OPEC+ coalition have agreed on July 2-4 for their next meeting in Vienna, Russia’s Novak said in St. Petersburg. Washington’s escalating trade war with Beijing hasn’t choked off the flow of American oil to China, according to ship tracking data compiled by Bloomberg. At least 6 million barrels of U.S. crude set off for Chinese refineries in May.