Brent crude futures added 53 cents, or 0.6%, to $85.53 a barrel, while U.S. WTI crude futures were at $82.05 a barrel, up 51 cents, or 0.6%
Oil prices jumped on Monday, supported by forecasts of a supply deficit stemming from peak summer fuel consumption and OPEC+ cuts in the third quarter, although global economic headwinds and growing non-OPEC+ output capped gains.
Brent crude futures added 53 cents, or 0.6%, to $85.53 a barrel by 0729 GMT, while U.S. West Texas Intermediate (WTI) crude futures were at $82.05 a barrel, up 51 cents, or 0.6%.
Both contracts added nearly 6% in June, with Brent settling above $85 a barrel in the last two weeks, after the OPEC+, extended most of its deep oil output cuts well into 2025.
That led analysts to forecast supply deficits in the third quarter as transportation and air-conditioning demand during summer draw down fuel stockpiles.
On Friday, the EIA’s reported that oil production and demand for major products rose to a four-month high in April, supporting prices.
We continue to hold a supportive view towards Brent, although there are concerns around demand, such as U.S. gasoline demand and Chinese apparent demand, ING analysts led by Warren Patterson said in a note.
Factory activity among smaller Chinese manufacturers grew at the fastest pace since 2021 due to overseas orders, a private index showed, even as a wider survey suggested weak domestic demand and trade frictions had led to another industrial sector contraction. China is the world’s second largest consumer and top crude importer.
Hopes of an interest rate reduction by the U.S. Fed and growing geopolitical concerns in Europe and between Israel and Lebanon’s Hezbollah have also kept a floor under prices, IG analyst Tony Sycamore said in a note.
West Texas Intermediate’s recent rally may extend towards $85 a barrel if prices remain above the 200-day moving average at $79.52, he added.
