- Crude oil futures rose on Monday after Saudi Aramco issued a bullish forecast for market demand.
- The oil producer’s CEO said Sunday he sees Asian demand nearing pre-pandemic highs as economies reopen.
- West Texas Intermediate crude jumped as much as 1.8%, to $41.96 per barrel, while international standard Brent crude gained 1.3% to $44.98.
- Prices were also supported by Iraq slashing production by 400,000 barrels per day. The move helps Iraq comply with production cuts set by OPEC+ earlier in the year.
- Watch oil futures trade live here.
Crude oil futures gained on Monday for the first time in three days after Saudi Aramco hinted at a strong demand recovery in Asia.
Saudi Aramco CEO Amin Nasser said Sunday he sees oil demand returning to pre-pandemic highs in Asia as economies reopen and activity resumes. Market demand has struggled to recover through the summer as new virus hotspots curb travel activity and delay full reopenings.
Oil prices were also boosted by supply-side support in Iraq. The country said on Friday it would slash output by 400,000 barrels per day to prop up demand. The cut brings Iraq’s production more in line with goals set out by OPEC+ earlier in the year.
Still, the coalition is waiting on the sideline to reverse production cuts and revive the battered market. OPEC+ issued record-size output cuts throughout the pandemic as oil prices cratered, and reintroducing supply serves as a major test for whether the market has stabilized.
Both WTI crude and Brent traded around $40 per barrel over the past few months after tumbling through the start of the pandemic. WTI contracts briefly sank below zero in April as traders feared a lack of storage would create lasting market damage.
WTI reached a five-month high on Wednesday after the US Energy Information Administration reported a drop in crude inventories through the end of July. Both WTI and Brent trade just off last week’s highs, but more positive signs could drive a strong uptrend through the fall, Craig Erlam, senior market analyst at OANDA Europe, said in a note.
“The breakout last week didn’t gather much momentum but more assessments like this may change that,” Erlam said. “Producers are looking to gradually increase production again from this month, something traders are clearly quite comfortable with.”
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