Oil prices rose on Monday as Saudi Arabia and Russia contracted global supply with lower exports, alleviating troubling concerns about global demand growth driven by high-interest rates.
Brent crude rose 75 cents to $85.55 a barrel at 0301 GMT, while West Texas Intermediate crude was up 80 cents and traded at $82.05. The September WTI contract expires on Tuesday, and the more active October contract rose 73 cents to $81.39 a barrel.
Both front-month benchmark prices snapped a 7-week winning streak last week to post a weekly loss of about 2% after the U.S. dollar strengthened on the possibility that interest rates could remain higher for longer, with China’s worsening property crisis adding to concerns about its sluggish economic growth and oil demand.
With OPEC+ crude oil exports falling for the second month in August, supply contracted. General supply is falling, and demand is rising. Unless there is a recession and demand slows or falls, OPEC+ will be in control.
The world’s largest importer of crude oil purchaser China refineries decreased buying after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, pushed global prices above $80 a barrel.
China is benefiting from record inventories it purchased earlier this year. According to customs data, in July Saudi Arabia’s shipments to China decreased by 31% compared to June, while Russia remained the largest supplier of the Asian giant with its discounted crude oil.
Meanwhile, China’s diesel exports increased in July. Chinese refineries increased their refined product exports in July, driven by strong export margins.
The number of operating oil rigs in the United States, an early indicator of future production, fell five to 520 last week, the lowest level since March 2022, Baker Hughes reported Friday.