LONDON (Reuters) – Oil prices rose on Monday, backed by tighter supplies and a series of data expected to show an economic recovery worldwide and despite an increase in coronavirus cases in the United States and other countries.
FILE PHOTO: The sun sets behind a crude oil pump jack on a drilling rig in the Permian Basin in Loving County, Texas, USA, November 24, 2019. REUTERS / Angus Mordant
Brent LCOc1 crude rose 73 cents, or 1.7%, to $ 43.53 per barrel at 0808 GMT. US West Texas Intermediate (WTI) CLc1 crude rose 28 cents, or 0.7%, to $ 40.93.
“The market appears to be avoiding the increase in COVID-19 cases in the United States,” ING said, adding that data from various cities in the affected states did not show a significant reduction in road traffic week by week.
Market sentiment was also positive as investors expected a series of improvements in economic data.
In China, the economy is recovering while its capital markets are attracting money, setting the stage for a healthy bull market, the official China Securities Journal said in an editorial on Monday.
Traders were also watching for US non-manufacturing activity, German industrial orders for May and retail sales for the eurozone, which expire on Monday and are all expected to be positive.
Chart: world oil demand and supply here
The implied volatility of Brent LCOATMIV crude has fallen to its lowest level since prices began to collapse in March, as markets remain focused on adjusting supplies as output from the Organization of the Petroleum Exporting Countries (OPEC) it fell to its lowest level in decades.
OPEC and other producers, including Russia, collectively known as OPEC +, agreed to cut production by a record 9.7 million barrels per day (bpd) for the third month in July.
“While risks on the demand side weigh on prices, the good discipline with OPEC + is credit support,” said Commerzbank analyst Eugen Weinberg.
Saudi Arabian oil producer Aramco raised August Official Selling Prices (OSP) for its Arab light crude.
US production, the largest in the world, is also falling. The number of oil and natural gas platforms in operation in the United States decreased for the ninth week, although the reductions have slowed as higher oil prices lead some producers to start drilling again.
Graph: The world’s main producers reduce production here
Report by Bozorgmehr Sharafedin in London; additional reports from Florence Tan in Singapore; editing by Jason Neely
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