Speculators credit an increase in oil prices to rumors of a possible production-cut deal that would include Saudi Arabia, other OPEC nations and Russia. The average oil price had dipped well below $30 a barrel recently, but is now around $31.

The rumor that has been circulating in oil markets around the world this week involves a possible deal between Saudi Arabia, other oil-producing states in the same region and Russia. The Saudis would be key, though, because of the desert nation’s large
reserves and its ability to increase or decrease production to affect the world market acting unilaterally.

Saudi Arabia has been investing heavily in its own solar energy industry, which could one day provide revenue from exported electricity. The Saudis see some long-term benefit in U.S. shale oil development if it would provide the world a steady source of oil
to stabilize markets and take some of that burden off Saudi Arabia. Saudi Arabia does not want to see too much competition develop and risk losing the market share that makes the desert kingdom a rich and important nation on the world scene.

Meanwhile, US energy firms cut oil rigs for the eighth straight week, according to the data from oil service company Baker Hughes Friday. Analysts expected major US shale oil companies to slash spending after crude prices plunged.
Persistent oversupply, bloated inventories and a slew of negative economic news dragged crude prices to 12-year lows Thursday.

A senior Iranian official says oil prices are likely to jump to unexpected levels in the next Persian calendar year which starts on March 21. Iran is preparing to supply more crude oil on markets owing to the lifting of international sanctions in January.

Because of overproduction chiefly by Saudi Arabia and non-OPEC producers, there is currently up to 2.5 mb/d of excess oil in the market which has caused crude prices to lose around 60% of their value since mid-2014.

COPPER: Copper held near a two-week low on concern that exports from Freeport-McMoRan’s Indonesia mine set to resume shipments from its Grasberg mine in Indonesia, the world’s second-largest for the commodity, will add to an oversupply. Most other industrial metals climbed.
Indonesia approved the renewal of an export license that will allow Freeport to ship about 1 million metric tons through August 8, according to a trade ministry official. Copper was down a fourth day on the London Metal Exchange, set for the longest run in almost a month.