Brent oil scores lift from Saudi price rise, China optimism, while U.S. crude weighed by rising coronavirus cases

Crude-oil futures on Monday were trading mixed, with the U.S. oil moves influenced by a evidence of growing cases of coronavirus and Brent at least partly lifted by enthusiasm over the perceived recovery from the pandemic in China.

Brent, the international benchmark oil, also was supported by Saudi Arabia’s decision to raise the premium of its benchmark grade crude, and all other grades, by a $1 a barrel, according to Reuters, citing people familiar, representing the third straight price increase by one of the biggest exporters of oil and the most influential member of the Organization of the Petroleum Exporting Countries.

Meanwhile, a blockade of oil-producing country Libya remains in place, hindering exports from the north African producer and helping to fuel expectations that supplies for crude may tighten more than expected.

Mustafa Sanalla, chairman of the National Oil Company, told the Financial Times (paywall) in an interview over the weekend that “some regional countries are complicating the negotiations while enjoying the absence of Libyan oil from the market.” An oil embargo has driven Libya’s daily oil production to 100,000 a barrel from an average of 1.2 million, the FT reported.

“Libya is shipping out a lot less crude and this just helps with that tighter supply theme,” wrote Edward Moya, senior market analyst at Oanda, in a daily research report.

On Monday, West Texas Intermediate crude for August
was up 11 cents, or 0.3%, at $40.76 a barrel on the New York Mercantile Exchange, after posting a weekly gain of 5% on Thursday, with U.S. markets closed for Independence Day on Friday.

Global benchmark Brent oil for September
rose 54 cents, or 1.2%, at $43.33 a barrel on ICE Futures Europe.

U.S. markets continue to contend with growing cases of COVID-19, with the U.S. adding more than 49,000 new cases on Sunday, according to data compiled by Johns Hopkins University. Cases in the U.S. account for about a quarter of the global total of more than 11.4 million infections.

But assets considered risky have seen an uptrend partly on the back of hope that China, one of the biggest importers of crude globally, can continue to show progress from emerging from the viral pandemic.

Last week, markets were supported by data from the Energy Information Administration, which reported Wednesday that U.S. crude inventories fell by 7.2 million barrels for the week ended June 26, coming after three consecutive weeks of increases. Analysts polled by S&P Global Platts had forecast an average crude supply decline of 2.7 million barrels.

Meanwhile, Duke Energy Corp.
and Dominion Energy
said that they were abandoning plans to build a $8 billion natural-gas pipeline in West Virginia and North Caroline, with Dominion agreeing to unload natural-gas assets to Warren Buffett’s Berkshire Hathaway
for a total of $9.7 billion, including debt.

August natural gas
was trading 11 cents, or 6.3%, higher at $1.845 per million British thermal units on Monday, after putting in a weekly gain of 12% on Thursday.

Source link