Oil rose amid signs that Russian crude output is falling, indicating that the market’s oversupply may be coming to an end.
Average Russian crude shipments fell below their February averages, according to new data, a key development in a market that has been held back this year by stronger-than-expected crude exports from the Kremlin.
Adding to the bullish sentiment is news that China will take further steps to revive its economy with additional stimulus. West Texas Intermediate rose above $74 a barrel, breaking above its 100-day moving average, which has been a key resistance level in recent months. Crude oil’s recent moves have been overshadowed by the drop in summer trading volumes.
Analysts at the US government and Standard Chartered Plc are now forecasting supply shortfalls in the coming months with expectations that demand will pick up.
However, crude is down 6.7% this year on weaker China, fears of a global economic slowdown due to central bank monetary tightening and resilience in oil supply. producers like Russia and Iran. In a recent effort to prop up the market, OPEC+ heavyweights Saudi Arabia and Russia have pledged to cut supply further.
Traders will look to the US consumer price index on Wednesday for clues on the way forward for interest rates, and monthly reports from OPEC and the International Energy Agency on Thursday for snapshots of the oil market. The US will provide its short-term energy outlook later on Tuesday.
Prices:
- WTI for August delivery rose $1.84 to settle at $74.83 a barrel.
- Brent for September settlement rose $1.71 to $79.40 a barrel.
-With the assistance of Devika Krishna Kumar.
