Europe and China, ME tensions: Oil prices climb 4pc on signs of more demand
NEW YORK: Oil prices climbed about 4% on Tuesday on signs of higher demand in Europe and China, rising tensions in the Middle East and as buyers emerged the day after prices collapsed to a four-year low on a decision by OPEC+ to boost output.
Brent futures rose $2.37, or 3.9%, to $62.60 a barrel at 11:12 a.m. (1512 GMT). US West Texas Intermediate (WTI) crude gained $2.42, or 4.2%, to $59.55.
Both benchmarks rose out of technically oversold territory, the day after their lowest settlements since February 2021.
OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, decided over the weekend to speed up oil production hikes for a second consecutive month.
'After evaluating the latest OPEC+ move to accelerate the easing of supply cuts, market players are focusing on developments in trade and the possibility ... that trade deals will be reached,' said Tamas Varga, an analyst at PVM, a brokerage and consulting firm that is part of TP ICAP.
Varga also pointed to the rise in geopolitical risk premium in the Middle East as Israel struck Iran-backed
Houthi targets in Yemen as a retaliation for an assault on Ben Gurion airport.
Prices also drew support after consumers in China increased spending during the May Day celebration and as market participants returned after the five-day holiday.
'China also reopened today, and being the largest (oil) importer, buyers would have likely jumped to secure oil at current low levels,' said Priyanka Sachdeva, senior market analyst at Phillip Nova. In the US, the dollar fell to a one-week low against a basket of currencies as investors grew impatient about trade deals. A weaker US currency makes dollar-priced oil less expensive for buyers using other currencies.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
an hour ago
- Business Recorder
Vopak's Indian JV starts trading on Mumbai stock exchanges
Dutch tank storage group Vopak said on Monday its Indian joint venture, Aegis Vopak Terminals, started trading after completing its initial public offering. The issue price for the IPO was 235 rupees ($2.75) per share, at the top end of the previously announced price range, the group said. The shares were trading at 238.89 rupees around 0539 GMT. The offering 'strongly supports Vopak's strategy of expanding our portfolio of gas and industrial terminals,' group CEO Dick Richelle said. The transaction will result in an exceptional dilution gain of around 110 million euros ($125.09 million) to be recorded by Vopak in the second quarter, the company said. Vopak has terminals in seven Indian ports and expects to benefit from the dynamic growth of the country's economy, with many more investment opportunities, notably in the liquefied petroleum gas (LPG) market.
Business Recorder
an hour ago
- Business Recorder
Goldman Sachs sees OPEC+ raising oil output by 0.41 mb/d in August
Goldman Sachs anticipates the eight country OPEC+ oil group will implement a final 0.41 million barrels per day (mb/d) production increase in August, the bank said in a note dated Sunday. 'Relatively tight spot oil fundamentals, beats in hard global activity data, and seasonal summer support to oil demand suggest that the expected demand slowdown is unlikely to be sharp enough to stop raising production when deciding on August production levels on July 6th,' Goldman Sachs said in a note. OPEC+, the world's largest group of oil producers, stuck to its guns on Saturday with another big increase of 411,000 barrels per day for July as it looks to wrestle back market share and punish over-producers. The decision likely reflects relatively tight spot fundamentals, a resilient global economy, and an ongoing shift toward a long-term equilibrium aimed at normalizing spare capacity, supporting internal cohesion, and disciplining U.S. shale production, Goldman Sachs noted. Oil prices rebounded more than $1 a barrel in early Asian trade on Monday after OPEC+ decided to increase output in July by the same amount as it did in each of the prior two months, in line with market expectation. Oil jumps after OPEC+ sticks to same output hike in July versus June Goldman Sachs expects OPEC+ to maintain flat production levels from September, citing slowing global growth in third quarter and new large-scale non-OPEC projects ramping up. Goldman maintained its cautious oil price forecast, projecting Brent crude to average $60 per barrel and West Texas Intermediate (WTI) $56 per barrel for the remainder of 2025. For 2026, it sees Brent at $56 and WTI at $52 per barrel. The forecast reflects expected supply growth outside of U.S. shale will drive surpluses of 1 mbpd in 2025 and 1.5 mbpd in 2026. The bank mainted its oil price forecast stating a moderate upgrade to demand offsets the increase in OPEC+ supply. Goldman Sachs further cited an upward revision of historical International Energy Agency (IEA) Africa demand estimates, stronger-than-expected European demand data, and a softer electric vehicle (EV) outlook in Western markets as contributing factors.
Business Recorder
an hour ago
- Business Recorder
Oil jumps after OPEC+ sticks to same output hike in July versus June
SINGAPORE: Oil prices rebounded more than $1 a barrel on Monday after producer group OPEC+ decided to increase output in July by the same amount as it did in each of the prior two months, which came as a relief to those who expected a bigger increase. Brent crude futures climbed $1.34, or 2.13%, to $64.12 a barrel by 0346 GMT after settling 0.9% lower on Friday. U.S. West Texas Intermediate crude was at $62.31 a barrel, up $1.52, or 2.5%, following a 0.3% decline in the previous session. Both contracts were down more than 1% last week. The Organization of the Petroleum Exporting Countries and their allies decided on Saturday to raise output by 411,000 barrels per day in July, the third month the group known as OPEC+ increased by the same amount, as it looks to wrestle back market share and punish over-producers. The group had been expected to discuss a bigger production hike. 'Had they gone through with a surprise larger amount, then Monday's price open would have been pretty ugly indeed,' analyst Harry Tchilinguirian of Onyx Capital Group wrote on LinkedIn. Oil traders said the 411,000-bpd output hike had already been priced into Brent and WTI futures. 'The headline motive has centred on punishing OPEC+ members like Iraq and Kazakhstan that have persistently produced above their pledged quotas,' said the Commonwealth Bank of Australia in a note on Monday. Oil prices fall on demand concerns in volatile session Kazakhstan has informed OPEC that it does not intend to reduce its oil production, according to a Thursday report by Russia's Interfax news agency citing Kazakhstan's deputy energy minister. Looking ahead, Goldman Sachs analysts anticipate OPEC+ will implement a final 0.41 million bpd production increase in August. 'Relatively tight spot oil fundamentals, beats in hard global activity data, and seasonal summer support to oil demand suggest that the expected demand slowdown is unlikely to be sharp enough to stop raising production when deciding on August production levels on July 6th,' the bank said in a note dated Sunday. Meanwhile, low levels of U.S. fuel inventories have stoked supply jitters ahead of expectations for an above-average hurricane season, analysts said. 'More encouraging was a huge spike in gasoline implied demand going into what's considered the start of the U.S. driving season,' ANZ analysts said in a note, adding that the gain of nearly 1 million bpd was the third-highest weekly increase in the last three years. Traders are also closely watching the impact of lower prices on U.S. crude production which hit an all-time high of 13.49 million bpd in March. Last week, the number of operating oil rigs in the U.S. fell for a fifth week, down four to 461, the lowest since November 2021, Baker Hughes said in its weekly report on Friday.
