Oil prices rise significantly after al-Naimi comments

Oil prices are making noticeable gains this morning. Brent has risen to almost $66 per barrel, while WTI has climbed to over $61 per barrel. As such, both prices have exceeded the highs they achieved on Friday. A weaker US dollar is lending prices buoyancy, as are comments made by the Saudi Arabian Oil Minister al-Naimi in the run-up to Friday's OPEC meeting, who expressed optimism about the development of demand, notes Commerzbank. The minister believes that supply will increase less sharply, meaning that the oil market will tighten in the second half of the year. In other words, he is confident that the strategy of defending market shares will have the desired effect. 

Furthermore, al-Naimi appeared unconcerned about a possible increase in Iraqi or Iranian oil supply. Al-Naimi's comments suggest that the production target will be left unchanged at the OPEC meeting. That said, al-Naimi also pointed out that it would take time for the oversupply to be reduced and for balance to be restored on the oil market. The rise in oil prices, in other words, is based primarily on expectations.