Oil soared on Monday, backed by data showing that Chinese factories are returning to pre-epidemic levels, signs of rising energy demand, and hopes of agreement on more economic stimulus packages related to the coronavirus in the United States.
Brent crude LCOc1 settled up 59 cents, or 1.3%, to $44.99 a barrel. West Texas Intermediate crude CLc1 was up 72 cents, or 1.8%, to $41.94 a barrel.
Prices found support after it has been tweeted that Democrats in the US are seeking to discuss economic aid with the coronavirus with the President. The oil complex is heavily dependent on this support.
While economies are gradually opening up, oil demand in Asia seems to be recovering.
Factory deflation in China, eased in July as global oil prices surged and industrial activity climbed to pre-pandemic levels.
The positive newses on the coronavirus front was enough to attract attention to the gasoline market again.
Iraq said on Friday that it would cut oil production by another 400,000 barrels a day in August and September to compensate for its overproduction in the past three months. This attitude will help Iraq comply with its share of the cut made by the Organization of Petroleum Exporting Countries and its allies known as OPEC +.
International companies operating in Iraq must also participate in the cuts. All of this will send a strong signal to the oil market at various levels.
