
Oil Jumps, Reaches Highest Level in Over a Month on Demand Optimism – Reuters
By Shariq Khan
NEW YORK (Reuters) – Oil prices rose nearly $2 a barrel on Monday, reaching their highest settlement levels in over a month, as investor optimism about demand grew.
U.S. West Texas Intermediate crude futures increased by $1.88, or 2.4%, to settle at $80.33 a barrel, marking the highest price since late April. Meanwhile, the global benchmark gained $1.63, or 2%, to $84.25 a barrel, also reaching levels not seen since April.
Last week, both benchmarks recorded their first weekly gain in four weeks, fueled by reports from the OPEC+ producer group, the International Energy Agency, and the U.S. Energy Information Administration, which raised confidence that oil demand will see improvement in the latter half of the year and help reduce inventory levels.
Assurances from OPEC+ regarding the possibility of pausing or reversing a plan to increase supplies in the fourth quarter, based on market conditions, contributed to the firming of prices. This plan, announced after the group’s meeting on June 2, had previously triggered a significant selloff.
“The outlook for strong fuel demand in the upcoming quarter, coupled with Saudi Arabia’s reassurance that the October supply increase will be determined by market conditions, has all seemed to lend support to prices,” remarked Ole Hansen of Saxo Bank.
Investors also repurchased some of the petroleum they had sold the week before, as indicated by data from the Commodity Futures Trading Commission.
“Those funds that anticipated a production battle quickly had their concerns alleviated when OPEC+ members launched a public relations campaign to assure the world that their production adjustments would be based on market realities,” commented Alex Hodes, an oil analyst at StoneX.
Economic indicators from China further bolstered hopes for stronger oil demand from the world’s largest importer. Recent data revealed that manufacturing investment in China grew robustly, increasing by 9.6% in the first five months of this year. However, other figures were mixed, with industrial output falling short of expectations.
Analysts from AEGIS Hedging noted that a rising geopolitical risk premium is also supporting oil prices. Concerns about a broader conflict in the Middle East remain high, especially after reports indicated heightened cross-border tensions involving Hezbollah and Israel, which could lead to escalated military actions.