Oil prices rose on Monday, supported by forecasts of a supply deficit resulting from summer fuel consumption and OPEC+ cuts in the third quarter, although headwinds from the global economy and the The increase in non-OPEC+ production limited the gains.
Brent crude futures rose 33 cents, or 0.4 percent, to $85.33 a barrel by 0439 GMT, while West Texas Intermediate oil futures were at $81.86 a barrel. , up 32 cents, or 0.4%.
Both contracts gained about 6% in June, with Brent settling above $85 a barrel for the past two weeks after the Organization of the Petroleum Exporting Countries and their allies, a group known as known as OPEC+, has extended most of its deep oil production cuts until 2025.
That led analysts to forecast supply shortfalls in the third quarter as demand for transportation and air conditioning during the summer reduces fuel inventories.
On Friday, the Energy Information Administration (EIA) reported that oil production and demand for major products hit a four-month high in April, supporting prices.
“We continue to support Brent, although there are demand concerns, such as US gasoline demand and apparent Chinese demand,” ING analysts led by Warren Patterson said in a note .
Activity among China’s small manufacturers grew at the fastest pace since 2021 thanks to overseas orders, according to a private index, although a broader survey indicated that weak domestic demand and trade frictions led to renewed contraction of the industrial sector. China is the world’s second largest consumer and largest importer of crude oil.
Hopes of a rate cut by the U.S. Federal Reserve and growing geopolitical concerns in Europe and between Israel and Lebanon’s Hezbollah also kept prices low, IG analyst Tony Sycamore said in a note.
WTI’s recent rally could extend to $85 a barrel if prices remain above the 200-day moving average at $79.52, he added.
Traders are monitoring the impact of hurricanes on oil and gas production and consumption in the Americas.
The Atlantic hurricane season began Sunday with Hurricane Beryl. Beryl, the earliest Category 4 hurricane on record, is heading toward the Windward Islands of the Caribbean, where it is expected to bring dangerous winds and flash flooding Monday, according to the U.S. National Hurricane Center. (Reporting by Florence Tan; Editing by Sonali Paul and Stephen Coates)
