Last Monday, crude oil prices went up by 2% due to promising economic data from Europe, Asia, and the United States. However, the rise in COVID-19 cases around the world, and the worry of a crude oil oversupply as the OPEC alliance eased on output cuts, still led to limited gains in oil futures.
Crude oil prices rose alongside other equities as data from the three continents showed an improvement in market demand.
Rising U.S. and international benchmarks
Global benchmark Brent crude rose by 66 cents, or 1.5%, to US$44.18 a barrel by 11:32 A.M. EDT (15:32 GMT).
Meanwhile the U.S. benchmark, West Texas Intermediate (WTI) gained 81 cents or 2%, to $41.08, as stated by a report from Reuters.
“I think the question is going to remain, as OPEC reduces their production cuts, are we going to continue to see oil inventories around the world decline,” the publication quotes Andy Lipow of Lipow Oil Associates.
Manufacturing activity in the United States saw an increase in July, the fastest rate of expansion since the sector began contracting in March 2019. Meanwhile, factories across the territories of Europe saw their first resurgence in one and a half years, according to Bloomberg.
Increased activity in Asia
In the same Bloomberg article, it also stated that China’s factory activities also increased at an accelerated pace in the same month of July. This was also the fastest manufacturing increase in the country since January of 2011.
At the same time, Chinese equities also saw a slight increase, as the S&P 500 Index rose to nearly as high as 1%.
Russian production is up
Reuters showed data published by Russia’s Energy Ministry early on Sunday which described that the country’s production of crude oil and gas condensates to 9.37 million barrels per day (bpd) in July.
This number was up from 9.32 million bpd the month prior. An agreement on crude oil output cuts made between the members of the Organization of the Petroleum Exporting Countries (OPEC), including Russia, is due to ease in August.
Saudi is expected to make oil price cuts
Meanwhile, Saudi Arabia, the world’s largest exporter of crude oil, has been expected to make the first cut to its official selling prices (OSPs) for crude after three months of raising their prices, as indicated by Oil Price.
Traders and oil refiners in the Asian region have expected Aramco, the Saudi-based oil giant, to cut its crude oil prices going to Asia by September. This is due to the recovery of oil demand still having an ill effect on the market.