Best News Network

Oil heads for the best month since early 2022 as market tightens

Oil headed for its biggest monthly gain in more than a year on signs the market is tightening, with estimates that crude demand is running at a record clip just as OPEC+ cuts back production.

West Texas Intermediate held above $80 a barrel after a run of five weekly gains that lifted prices to the highest since April. The US crude benchmark has rallied almost 14% this month, putting it on course for the biggest advance since January 2022. It’s the best performance for July in almost two decades.

“Record high demand and Saudi supply cuts have brought back deficits,” Goldman Sachs Group Inc. analysts including Daan Struyven and Yulia Zhestkova Grigsby said in a note that reaffirmed a forecast for Brent at $86 a barrel by December. “The market has abandoned its growth pessimism.”

Oil’s string of advances mean futures in New York have erased their year-to-date losses, with expectations that the Federal Reserve is close to ending its cycle of monetary tightening also aiding sentiment as the dollar weakens. US employment data due this week is likely to signal a healthy demand outlook, while top importer China presses on with stimulus to boost its economy.

A reduction of supply from OPEC+ linchpins Saudi Arabia and Russia has improved the outlook for crude. Earlier this month, Deputy Prime Minister Alexander Novak said Russia will cut crude exports by 500,000 barrels a day in August, with Saudi Arabia also extending its supply curbs next month.

Data from China showed manufacturing contracted for a fourth month in July, while non-manufacturing expanded slower than expected. Officials from the National Development and Reform Commission and other ministries will hold a briefing later Monday to outline measures to expand consumption.

Speculators have boosted bullish wagers across the energy complex as crude prices broke out of their recent range. Combined net long positions on WTI and global benchmark Brent have swelled to the highest in three months.

Prices
  • WTI for September delivery shed 0.4% to $80.28 a barrel at 2:02 p.m. in Singapore.
  • Brent for September settlement, which expires Monday, lost 0.5% to $84.55 a barrel.
    • The more-active October contract fell 0.4% to $84.08 a barrel.

© 2023 Bloomberg

Stay connected with us on social media platform for instant update click here to join our  Twitter, & Facebook

We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.

For all the latest Business News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! NewsAzi is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.