© Reuters. FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving CountyMELBOURNE (Reuters) – Oil prices rose in early trading on Monday, accounting for more than half of Friday’s losses, in hopes of a stimulus to deepen US economic recovery and a pledge by Iraq to deepen cuts on crude oil.
US West Texas Intermediate (WTI) futures () futures rose 49 cents, or 1.2%, to $ 41.71 per barrel at 0010 GMT, while Brent crude () futures rose 40 cents, or 0.9%, to $ 44.80 per barrel.
While both benchmark contracts fell on Friday, hurt by concerns about demand, Brent ended the week up 2.5%, with WTI up 2.4%.
Hopes grew on Sunday that a stand-off would end between U.S. Democrats and the White House over a new support package for cash-strapped U.S. states affected by the coronavirus pandemic.
US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin both said they were ready to resume talks on a deal to cover the rest of 2020.
At the same time, Saudi Arabia’s Aramco’s (SE 🙂 Chief Executive Amin Nasser said he sees oil demand in Asia as economies gradually open up to the coronation of coronavirus locks.
“There has been a slight undercurrent of positivity this morning from comments from Saudi Aramco who see a recovery in demand, “said AxiCorp brand strategist Stephen Innes.
On the supply side, Iraq said on Friday that it would reduce its oil production in August and September by another 400,000 barrels per day to compensate for its overproduction in the past three months. The move would help meet its share of cuts by the Organization of Petroleum Exporting Countries and its allies, collectively called OPEC +.
The sharper cut will take Iraq’s total reduction to 1.25 million bpd this month and next.
“Saudi Arabia and Iraq to build better relations over the oil deal are excellent from a compliance perspective,” Innes said.
The Saudi and Iraqi energy ministers said in a joint statement that OPEC + efforts would improve the stability of global oil markets, accelerate their balancing and send positive signals to the markets.
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