Oil futures continued on Monday, driven by increasing US-China tensions. Prices have received support from news that OPEC and Russia are close to an agreement extending production cuts.
Brent futures LCOc1 rose 48 cents, or 1.3%, to settle at $38.32 a barrel. WTI crude CLc1 fell 5 cents, or 0.1%, to settle at $35.44 a barrel.
Oil Exporting Countries and Russia, known as OPEC +, stated that they are approaching a compromise in extending oil production cuts and that they support the idea of extending it for one to two months.
Algeria suggested that OPEC + hold a meeting on June 4, instead of meeting on June 9-10.
Traders said that stocks in Cushing, Oklahoma fell to 54.3 million barrels during the week of May 29. North American oil production drops are believed to have peaked in May. It is said that oil prices no longer require more production cut support and producers should consider increasing production.
However, investors are advised to be more cautious about China retaliating against US interventions on Hong Kong.
Due to the interventions, China asked government companies to stop the purchase of soybeans and pork from the United States.
The possibility of increased tension poses a risk for possible rally in oil prices.
Economic concerns and question marks regarding the improvement in fuel demand are also reflected in oil futures.