On Monday Oil prices rose after Saudi Arabia said OPEC club producer and Russia should limit supplies to current levels, while Washington’s withdrawal from a tariff threat against Mexico lifted a cloud on the global economy.
However, traders said concerns about the health of the global economy and the impact on fuel demand were still pounding on the oil market sentiment.
Brent’s first month gross earnings were $ 63.61 at 0645 GMT, 32 cents, or 0.5%, more than Friday’s close.
U.S. Unprocessed Income West Texas Intermediate (WTI) was $ 54.32 per barrel, 33 cents, or 0.6%.
Unprocessed prices were rising after statements by Saudi Arabia’s largest OPEC producer on Friday that the group was close to accepting the expansion of supply cuts, at least so the dealers said.
“The future of Brent continues to grow … after Saudi Arabian Arab Energy Minister voiced confidence that OPEC + producers will extend their production cuts program during the second half of 2019,” said Han Tan, an analyst at FXTM Future Broker.
The Organization of Petroleum Exporting Countries (OPEC) and some non-members, including Russia, collectively known as “OPEC +”, have been holding supplies since the beginning of the year to support prices.
Stephen Innes, managing partner at Vanguard Markets, said the most powerful stock markets also supported the future of oil.
“With the Mexican barrier avoided and there are no harmful companions from the weekend G-20 meeting … oil can be marketed favorably, as WTI and Brent will continue to pursue the wider environment of high risk, said Innes.
Stock markets rose on Monday after an agreement between the United States and Mexico to combat illegal migration from Central America at the end of last week lifted the threat of US tariffs on goods imported from Mexico.
But analysts said there were still concerns about the health of the global economy, with the United States and China closed in a trade war.
“Over the past week, our economists have revised the GDP growth forecast for the US, China, India and Brazil,” Barclays Bank (LON: BARC) said on Monday in a note about the economy and its impact on oil demand.
“These countries account for more than three-quarters of the assumptions of rising oil demand for this year and revisions imply a reduction of 300,000 barrels a day in our current oil demand forecast of 1.3 million barrels per day from year to year this year, “the British bank said.
China’s crude oil imports fell to about 40.23 million tons (9.47 million barrels a day), from a total sum of 43.73 million tons in April, customs data records showed on Monday as the largest importer in the world of goods deterred by Iran among the strongest US sanctions.
Slow demand has also contributed to a decline in negative territory in refining profits for Asian oil, an important food for the oil industry, at levels that have not been seen in more than a decade./Investing.com