Oil rose one per cent yesterday as signs of strong demand outweighed the impact of Opec+ hiking output more than expected for August, as well as concern about the potential impact of US tariffs.
Brent crude futures rose 91 cents, or 1.3 per cent, to $69.20 in the afternoon. US West Texas Intermediate crude was at $67.57, up 57 cents, or 0.8pc. The benchmarks had fallen to $67.22 and $65.40, respectively, earlier in the session.
“The supply picture definitely looks to be elevating, however, the stronger demand is remaining above expectations as well,” Dennis Kissler, senior vice president of trading at BOK Financial.
A record number of Americans had been set to travel for the Fourth of July holiday by road and air, travel industry statistics showed.
Opec+ agreed on Saturday to raise production by 548,000 barrels per day in August, more than the 411,000 bpd hikes they made for the earlier three months.
The Opec+ decision will bring nearly 80pc of the 2.2 million bpd voluntary cuts from eight Opec producers back into the market, RBC Capital analysts, led by Helima Croft, said in a note.
However, the actual output increase has been smaller than planned so far and most of the supply has been from Saudi Arabia, analysts said.
The actual month-on-month rise in Opec+ output is generally smaller, because overproducers Iraq and Kazakhstan are unlikely/unable to significantly raise their output compared with the recent heights reached during the first quarter, analysts at research firm FGE wrote in a note.
In a show of confidence about oil demand, Saudi Arabia on Sunday raised the August price for its flagship Arab Light crude to a four-month high for Asia.
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