A gas station attendant pumps fuel into a customer’s car at a gas station in Shanghai, China, November 17, 2017. Photo: Ali Song/Reuters. Obtain licensing rights
LONDON, Sept. 4 (Reuters) – Oil prices stabilized on Monday on expectations that OPEC+ will keep supply limited and speculation that the US Federal Reserve will halt its aggressive campaign to raise interest rates.
Saudi Arabia has led efforts to prop up prices, making large voluntary production cuts as part of the production deal agreed by the OPEC+ group of producers comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia.
The kingdom is widely expected to extend its voluntary cut by 1 million bpd for the fourth consecutive month in October. Saudi Arabia’s previous announcements came before the official selling prices, which usually appear in the first week of the month.
Meanwhile, Russian Deputy Prime Minister Alexander Novak said that Moscow had agreed with OPEC+ partners on the criteria for continuing export cuts in October.
Saudi Arabia and Russia could withdraw the cuts at any time, said Craig Erlam, an analyst at OANDA, “but I can’t imagine they would be in such a hurry and risk driving prices down again.”
Brent crude futures for November delivery rose 23 cents to $88.78 a barrel by 1407 GMT. US West Texas Intermediate crude futures for October rose 22 cents to $85.77.
Vitol CEO Russell Hardy said on Monday that he expects the global crude oil market to decline in the next six to eight weeks due to refinery maintenance, but supplies to refineries in India, Kuwait, Jizan (Saudi Arabia), Oman and China are high-sulfur crude, With a decline, the high sulfur content should remain tight in light of the OPEC+ cuts.
Meanwhile, US jobs data for August reinforced expectations that the Federal Reserve will halt its interest rate increases this month.
In China, manufacturing activity unexpectedly expanded in August and a series of economic measures to support the country’s post-pandemic recovery fueled optimism that demand will rebound in the world’s largest oil importer.
“President Xi has been talking about his usual broad and bold statements, but the market seems to have more receptive and less pessimistic ears this morning,” said John Evans of oil brokerage PVM.
His promises to boost the services sector and ease cross-border trade restrictions find sympathy from a market that has fewer engines and no US participants.
(Reporting by Paul Carsten and Natalie Grover in London and Mohi Narayan in New Delhi) Additional reporting by Yusuf Saba in Dubai and Andrew Haley in Beijing (Editing by Jason Neely and David Goodman)
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