Oil prices rose on Monday, supported by hopes of increased demand during the summer driving season in the Northern Hemisphere, which offset the impact of Chinese economic data that showed a tentative recovery for the world’s biggest crude importer.
Apart from retail sales that beat expectations due to increased demand during the holiday season, most Chinese economic data released today was largely negative, and came in line with a survey on Friday that showed consumer sentiment in the US fell in June. Low volume in seven months.
Brent crude was up 33 cents, or 0.4 percent, at $82.95 a barrel by 12:12 GMT, and U.S. West Texas Intermediate crude futures were up 25 cents, or 0.3 percent, at $78.70 a barrel.
Last week, both benchmarks posted their first weekly gains in four weeks, supported by hopes that oil inventories will fall as summer begins in the Northern Hemisphere amid continued supply cuts from the OPEC+ alliance.
Saxo Bank’s Ole Hansen said: “The crude oil market initially reacted negatively to mixed data from China … but strong demand expectations for the fuel next quarter, followed by a pledge by Saudi Arabia to pick up in October. More focus on conditions and quota violators “to cut and curb output. , all of which seem supportive.”
OPEC Plus production increases planned for the fourth quarter could be temporarily halted or both Russia and Iraq pledged last week to pay more than their quotas to OPEC Plus.
Two reports released last week by the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency bolstered hopes that oil inventories will decline in the second half of the year, although they differed on the strength of oil demand growth this year.
But despite market expectations that oil prices will rise in the third quarter, there are risks to prices if the balance between supply and demand remains weak, Bank of America analysts said in a report.
“It remains unclear whether the balance between supply and demand will improve enough in the third quarter to allow the market to shift from a large surplus to a deficit, leading to higher prices,” the analysts wrote.
On the geopolitical level, fears of a wider war in the Middle East continued after the Israeli military said on Sunday that intense cross-border fire into Israel from the Lebanese Hezbollah group could lead to a dangerous escalation.
