One sentence summary – Oil prices have stabilized at seven-month highs as traders anticipate further supply reductions from Saudi Arabia and Russia, supported by positive economic data from the U.S. and China, although U.S. fuel demand is predicted to decrease following the Labor Day weekend.
At a glance
- Oil prices stabilize at seven-month highs
- Russia and Saudi Arabia expected to announce further supply cuts
- Positive economic data from the U.S. and China support steady demand
- U.S. fuel demand predicted to decrease after Labor Day weekend
- Low inventories and underinvestment in new oilfields make the market vulnerable to price spikes
The details
Oil prices have stabilized at seven-month highs as traders anticipate further supply reductions from Saudi Arabia and Russia.
Russia is expected to announce additional supply cuts this week.
Saudi Arabia is likely to extend its one million barrel per day cut into October.
The positive outlook is bolstered by economic data from the U.S. and China, suggesting steady demand.
However, U.S. fuel demand is predicted to decrease following the Labor Day weekend.
Brent oil futures increased by 0.3% to $88.77 a barrel.
West Texas Intermediate crude futures rose by 0.4% to $85.86 a barrel.
Russia has agreed to a new deal with OPEC+ to further reduce supply.
Details of the agreement are expected to be released this week.
Both Russia and Saudi Arabia have led oil production cuts this year, supporting crude prices.
In China, the purchasing managers’ index (PMI) data showed manufacturing activity increased in August.
This has fueled hopes for a stimulus-driven economic recovery.
More economic readings and supportive measures from Beijing are eagerly awaited.
In the U.S., nonfarm payrolls grew more than expected in August, indicating robust business activity.
However, unemployment also increased.
The strength of the dollar limited larger gains in oil prices.
Trading volumes are expected to be low due to a U.S. market holiday.
U.S. crude futures traded 0.2% lower at $85.42 a barrel.
The Brent contract dropped 0.2% to $88.42.
Despite this, both contracts ended the previous week at their highest levels in over half a year.
The gains were supported by a larger-than-expected draw in U.S. inventories.
Russian Deputy Prime Minister Alexander Novak announced a new deal with OPEC to further cut supplies.
Saudi Arabia is expected to extend its voluntary oil production cut, likely into October.
The U.S. nonfarm payrolls growing more than expected in August suggested that the Federal Reserve will not raise interest rates this month.
PMI readings also indicated robust business activity in the U.S., boosting hopes for oil demand.
In China, manufacturing activity unexpectedly expanded in August, reducing pessimism about the economic health of the world’s largest oil importer.
Chinese trade data, to be released on Thursday, will be closely monitored for evidence of increased crude demand.
Speculators reduced their net long in ICE Brent, but the actual speculative net long is expected to have increased.
Oil prices rose on expectations of tight supplies and speculation of a pause in the U.S. Federal Reserve’s interest rate hikes.
Saudi Arabia has implemented voluntary output cuts to support prices and is expected to extend them into October.
Russia has agreed with OPEC+ partners on continued export cuts in October.
Brent crude futures for November settled at $89.00 a barrel.
U.S. WTI crude October futures rose to $85.95.
Although global crude oil supplies are expected to improve in the next six to eight weeks due to refinery maintenance, sour crude will remain tight.
The oil market remains vulnerable to price spikes due to low inventories and underinvestment in new oilfields.
The U.S. August jobs data has increased expectations of a pause in interest rate increases by the Federal Reserve.
Meanwhile, manufacturing activity in China expanded unexpectedly in August, leading to optimism about increased demand as the world’s largest oil importer.
The Chinese government’s economic measures to support post-pandemic recovery have been well-received by the market.
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| uk.investing.com |
|---|
| – Oil prices steadied at seven-month peaks – Traders anticipate more supply reductions from Saudi Arabia and Russia – Russia will outline more reductions in supply this week – Saudi Arabia expected to extend one million barrel per day cut into October – U.S. and Chinese economic data contribute to optimism over steady demand – U.S. fuel demand likely to trend lower after Labor Day weekend – Brent oil futures rose 0.3% to $88.77 a barrel – West Texas Intermediate crude futures rose 0.4% to $85.86 a barrel – Russia reached a new deal with OPEC+ to further reduce supply – Details of the deal to be released this week – Russia will extend supply cuts into October – Saudi Arabia expected to extend supply reductions into October – Saudi Arabia and Russia led oil production cuts this year – Production cuts by the two countries supported crude prices – Purchasing managers’ index (PMI) data from China showed manufacturing activity grew in August – Hopes for a stimulus-driven economic recovery in China – More economic readings and supportive measures from Beijing awaited – Nonfarm payrolls in the U.S. grew more than expected in August – Unemployment also rose in the U.S. – Business activity in the U.S. remained robust – Strength in the dollar limited bigger gains in oil prices – Trading volumes expected to be low due to a U.S. market holiday. |
| uk.investing.com |
|---|
| – U.S. crude futures traded 0.2% lower at $85.42 a barrel, while the Brent contract dropped 0.2% to $88.42. – Both contracts ended last week at their highest levels in over half a year. – |
| The gains were helped by a bigger-than-expected draw in U.S. inventories. – Russian Deputy Prime Minister Alexander Novak announced a new deal with OPEC to further cut supplies. |
| – Saudi Arabia is expected to announce its decision on extending a voluntary oil production cut. |
| – Analysts believe the Saudis will likely extend the cut into October. |
| – U.S. nonfarm payrolls grew more than expected in August, suggesting the Federal Reserve will not raise interest rates this month. |
| – PMI readings showed that business activity in the U.S. remained robust, boosting hopes for oil demand. – Chinese manufacturing activity unexpectedly expanded in August, reducing pessimism about the economic health of the world’s largest oil importer. |
| – Chinese trade data will be released on Thursday, with traders looking for evidence of increased crude demand. |
| – Speculators reduced their net long in ICE Brent, but the actual speculative net long has likely increased. |
| uk.investing.com |
|---|
| – Oil prices rose on expectations of tight supplies and speculation of a pause in the U.S. Federal Reserve’s interest rate hikes. |
| – Saudi Arabia has implemented voluntary output cuts to support prices and is expected to extend them into October. |
| – Russia has agreed with OPEC+ partners on continued export cuts in October. |
| – Brent crude futures for November settled at $89.00 a barrel, while U.S. WTI crude October futures rose to $85.95. – Global crude oil supplies are expected to improve in the next six to eight weeks due to refinery maintenance, but sour crude will remain tight. – |
| The oil market is vulnerable to price spikes due to low inventories and underinvestment in new oilfields. |
| – U.S. August jobs data has increased expectations of a pause in interest rate increases by the Federal Reserve. |
| – Manufacturing activity in China expanded unexpectedly in August, leading to optimism about increased demand as the world’s largest oil importer. |
| – Chinese economic measures to support post-pandemic recovery have been well-received by the market. |
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