Oil Inches Up on Summer Demand Outlook, Energy News, ET EnergyWorld

VaselineJuly 1, 2024

0 2 minutes read

Oil Inches Up on Summer Demand Outlook, Energy News, ET EnergyWorld

Oil prices rose in early trade on Monday, supported by forecasts of a supply shortfall from peak summer fuel consumption and third-quarter OPEC+ cuts, although global economic headwinds and non-OPEC+ output growth capped gains.

Brent crude futures were up 16 cents, or 0.2 percent, at $85.16 a barrel by 0032 GMT, while U.S. West Texas Intermediate crude futures were at $81.71 a barrel. barrel, up 17 cents or 0.2%.

Both contracts gained about 6 percent in June, with Brent settling above $85 a barrel in the past two weeks after the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, extended most of their deep cuts of oil production. well in 2025.

That has led analysts to forecast supply shortfalls in the third quarter as demand for transportation and air conditioning in the summer eats away at fuel stocks.

Hopes of an interest rate cut by the US Federal Reserve and growing geopolitical concerns in Europe and between Israel and Hezbollah in Lebanon also kept a floor under prices, IG analyst Tony Sycamore said in a note.

WTI’s recent rally may extend to $85 a barrel if prices remain above its 200-day moving average at $79.52, he said.

U.S. oil production and demand rose to four-month highs in April, according to the Energy Information Administration’s (EIA) monthly oil supply report released on Friday.

Traders are wary of the hurricanes’ impact on America’s oil and gas production and consumption.

The Atlantic hurricane season kicked off on Sunday with Hurricane Beryl. Beryl, the earliest Category 4 hurricane on record, headed toward the Windward Islands in the Caribbean, where it is expected to bring life-threatening winds and flash flooding on Monday, the US National Hurricane Center said.

In China, the latest production data did not bode well for oil demand in the world’s second largest crude consumer and importer.

China’s manufacturing activity fell for a second month in June, while services activity fell to a five-month low, an official survey showed on Sunday, keeping alive calls for more stimulus as the economy struggles to recover.