August 07, 2023 (MLN): Oil prices remain mixed on Monday after reaching their highest level since mid-April amid supply cuts imposed by Saudi Arabia and Russia, the top oil producers.
Brent crude is currently trading at $82.86 per barrel, up by 0.05% on the day.
While West Texas Intermediate crude (WTI) is trading at $82.24 per barrel, up by 0.02% on the day.
To note, oil prices have recorded six consecutive weeks of gain and ended July with the best monthly performance since January 2022.
Saudi Arabia on Thursday extended a voluntary oil production cut of 1 million barrels per day (bpd) to the end of September, as per a state news agency.
Russia said on Thursday would cut oil exports by 300,000 bpd in September. In addition, a Russian warship was last week seriously damaged in a Ukrainian naval drone attack on Russia's Black Sea navy base at Novorossiysk. The port that handles 2% of the world's oil supply has resumed operations, as Reuters reported.
In line with production cuts, Saudi Aramco raised on Saturday the official selling prices for most grades it sells to Asia for a third month in September.
"The bullishness is in line with our expectations of a stronger second half for oil compared to the first half," said Suvro Sarkar, lead energy analyst at DBS Bank.
"But we think further upside may be limited and oil prices could consolidate around the $85 a barrel level (Brent) for a while, capped by ongoing concerns about the pace of China's recovery and doubts about how long Saudi and Russia will continue to curb production and exports, respectively, given the spare capacity on hand," he added.
OPEC+'s output cuts, China's stimulus measures, and an improved U.S. economic outlook are supporting crude prices, CMC Markets analyst Tina Teng said in a note, although she said prices were approaching near-term resistance of their April highs.
IG market analyst Tony Sycamore said a sustained break for WTI above $84.00 a barrel would open a move toward $93.50.
Investors will watch for Chinese economic data this week to gauge Beijing's appetite for more stimulus measures to support the world's second-largest economy.
Copyright Mettis Link News
Posted on: 2023-08-07T12:14:04+05:00
