An Aramco refinery in Saudi Arabia. Image Credit: Reuters

Tokyo: Oil rose as Saudi Arabia offered reassurance that Opec will keep global crude markets in balance after concerns over the US-China trade dispute triggered the steepest monthly slump this year.

Futures gained 1.7 per cent in New York after another plunge on Friday concluded May’s 16 per cent sell-off, which was driven by worries that the trade war will crimp fuel demand. Saudi Energy Minister Khalid Al Falih said that recent volatility is “unwarranted” and reiterated his confidence that Opec and its allies will keep taking action to stabilise the market beyond June.

“I would like to reiterate my confidence, based on my discussions with several key producers, and on our track record, that we will do what is needed to sustain market stability beyond June” Al Falih said in an interview with state-run Saudi Press Agency. “We have previously stated our commitment to do whatever it takes to stabilise markets and we have delivered on those promises. And I am making that commitment again.”

The trade tensions mean oil has moved close to the edge of a bear market, having fallen about 18 per cent from a high in late April. A tense situation in the Middle East hasn’t been enough to support prices. There could be greater clarity this week on whether Russia will keep cooperating with Saudi Arabia on production cuts as ministers from the countries meet in St Petersburg.

“The market was overwhelmed by general bearish sentiment last week,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. “Oil is not immune to global growth weakness, but there is now a significant risk that the market is overselling.”