On Monday, crude oil prices were boosted by upbeat Chinese data and forecasts of inventory cuts from significant producers.
The West Texas Intermediate crude futures for October delivery rose by 0.12% to $85.65 per barrel. Likewise, Brent oil contracts for November exports jumped by 0.03% to $88.58 a barrel on September 04’s Asian afternoon session.
Last week, both benchmarks maintained high prices for over half a year, breaking their two-week downward price movement.
Regarding demand, manufacturing activity in China had an unanticipated expansion in August. It led to hopes about the economic health of the world’s top oil importer.
According to Beijing, economic support measures like deposit rate cuts and easing borrowing rules supported the fuel prices.
On the other hand, investors are still waiting for more considerable moves to spike the country’s property sector. Besides, it was a significant factor that weighed on China’s economy in recovering from the pandemic.
Moreover, forecasts of oil supply cuts grew after the Russian Deputy Prime Minister agreed with OPEC about slashing exports. Information about the estimated cuts is also expected to be officially announced this week.
Furthermore, Russia mentioned it will cut deliveries by 300,000 barrels per day in September. It would be followed by a decrease of 500,000 bpd in August. Also, Saudi Arabia anticipates a voluntary one million bpd cut in October.
US Demand Recovery Pulls Up Oil Prices
According to the US Energy Information Administration, oil demand in the US strengthened as crude storage declined.
Analysts said fuel prices gave an excellent response to labor market data, which hints at a decrease in interest rates. They added that the commodity was on a good path as Brent traded at its highest level this year.
Moreover, supply cuts merged with curbs by OPEC and OPEC+ in pulling up oil prices. Other experts said future price movements would be more driven by further demand than supply cuts, powering weaker outputs.
On the other hand, higher gasoline costs left a mark for a while in the US. However, gas appetite for the high-demand summer driving season likely topped last year’s figures.
