Oil prices rose sharply on Monday as expectations of strong demand and a belief that a key producer group will not turn on the spigots too fast helped reverse initial losses caused by the release of fuel reserves by China, the world’s biggest energy consumer.
Brent crude futures advanced 99 cents, or 1.2%, to end the day at $84.71 per barrel, after hitting a session low of $83.03.
U.S. West Texas Intermediate (WTI) crude futures settled 48 cents, or 0.57%, higher at $84.05 per barrel.
Oil rallied to multi-year highs last week, helped by a post-pandemic demand rebound and the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, sticking to gradual, monthly production increases of 400,000 barrels per day (bpd), despite calls for more oil from major consumers.
OPEC+ is expected by analysts to stick to that number at its Nov. 4 meeting, with members Kuwait and Iraq in recent days voicing their support for it, saying those volumes were adequate.
U.S. President Joe Biden on Saturday urged major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery as part of a broad effort to pressure OPEC+ to raise supplies.
Prices rose despite China saying in a rare official statement that it had released gasoline and diesel reserves to increase market supply and support price stability in some regions.
Spurred by rising oil prices, U.S. energy firms added oil and natural gas rigs for a 15th month in a row in October, taking them to the highest since April 2020, energy services firm Baker Hughes Co said on Friday.
Reference: CNBC
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