Oil Rises On Mixed Signals From Biden Trip To Saudi Arabia

Officials say the trip won't result in more output, but Biden says it will: File Image/Pixabay

To the surprise of nobody with the possible exception of some mainstream news pundits, it was reported on Friday that U.S. president Joe Biden's much ballyhooed trip to Saudi Arabia won't end with the kingdom pumping more oil to alleviate a worldwide shortage - and this caused  oil prices to gain $2.5 percent.

After a U.S. official told media that an immediate Saudi output hike was not expected, and with the Organization of the Petroleum Exporting Countries (OPEC) seemingly unable to ramp up crude production, Brent rose $2.06 to settle at $101.16 per barrel, while West Texas Intermediate gained $1.81 to settle at $97.59.

But despite the official throwing cold water on Biden's Saudi excursion, Biden, who previously stated that the trip wasn't intended as a mission to get the Saudi's to increase production, maintained a brave face and said supply increases were coming anyway: "I'm doing all I can to increase the supply for the United States of America, which I expect to happen, [and] the Saudis share that urgency…..and based on our discussions today, I expect we'll see further steps in the coming weeks."

Adel Al-Jubeir, Saudi minister of state for foreign affairs, said, "We assess demand and we work in consultations with other oil producers in OPEC and OPEC+ to make sure that we have adequate supplies.

"We base that on fundamentals, not on speculations, not on hysteria, not on geopolitics."

While Biden critics are sure to add his trip to the long list of other disappointments racked up by the democratic leader, Joseph McMonigle, secretary general of the International Energy Forum, remarked that the trip was good for oil markets because "It's good for market stability and energy security when the top two producers are meeting."

McMonigle added that a lot of relationship building between the two countries led up to the president's visit, "so I think a lot can come out of this trip….the bottom line is we need more energy from all sources, not just oil," and not just from OPEC.

Meanwhile, the global energy market got a break on Friday when Farhat bin Qadara, the new chairman of the National Oil Corporation, announced on Friday that it was lifting the force majeure and the end of all closures of all oil fields and ports in Libya.

Bin Qadara said in an interview with Bloomberg, "The first step I will take is to return to previous oil production rates before the closure, and it will be within a week."

Libya's energy facilities have been a major cause of the nation's conflicts, with different groups shutting down oil output for various political and economic demands, but Bin Qadara stressed that the NOC under his leadership will cooperate and work in coordination with the government and the oil ministry.