Oil prices back on the rise on U.S. stimulus hopes, Iraq output cut


© Reuters. FILE PHOTO: The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County

MELBOURNE (Reuters) – Oil prices climbed in early trade on Monday, clawing back over half of Friday’s losses, on hopes for a stimulus deal to shore up the U.S. economic recovery and a pledge from Iraq to deepen its crude oil supply cuts.

U.S. West Texas Intermediate (WTI) crude () futures rose 49 cents, or 1.2%, to $41.71 a barrel at 0010 GMT, while Brent crude () futures were up 40 cents, or 0.9%, at $44.80 a barrel.

While both benchmark contracts fell on Friday, hurt by demand concerns, 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 on a new support package for cash-strapped U.S. states hit by the coronavirus pandemic.

U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin both said they were willing to restart talks on a deal to cover the rest of 2020.

At the same time, Saudi Arabian Aramco’s (SE:) Chief Executive Amin Nasser said he sees oil demand rebounding in Asia as economies gradually open up after the easing of coronavirus lockdowns.

“There’s a small undercurrent of positivity this morning emanating from comments by Saudi Aramco who are seeing a recovery in demand,” said AxiCorp market strategist Stephen Innes.

On the supply side, Iraq said on Friday it would cut its oil output by a further 400,000 barrels per day in August and September to compensate for its overproduction in the past three months. The move would help it comply with its share of cuts by the Organization of the Petroleum Exporting Countries and their allies, together called OPEC+.

READ  Chhattisgarh consumers to get compensation for power cuts

The sharper cut will take Iraq’s total reduction to 1.25 million bpd this month and next.

“Saudi Arabia and Iraq forging better relationships over the oil deal are excellent for the compliance outlook,” 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 its balancing and send positive signals to the markets.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here