Crude oil prices climbed higher on Monday and the oil futures contract posted the biggest monthly gain in over a year, amid signs of tight supply and optimism over increased demand in the U.S. and China.
Rising expectations about an end to U.S. rate hikes, and hopes that Saudi Arabia will continue with its output reduction plan right through the month of September contributed as well to the uptick in oil prices.
Oil was also supported by a note from Goldman Sachs that suggested the demand has not peaked as yet.
West Texas Intermediate Crude oil futures for September ended higher by $1.22 or about 1.5% at $81.80 a barrel. WTI crude futures gained about 16% in July.
Brent crude futures settled at $85.56 a barrel, gaining $0.57 or about 0.7%.
According to reports, a Reuter survey says the Organization of the Petroleum Exporting Countries (OPEC) has pumped 27.34 million barrels per day this month, down 840,000 bpd from June. That’s the lowest since September 2021.
“Crude prices are finishing a solid month on a high note as demand prospects remain impressive and no one doubts that OPEC+ will keep this market tight. The oil market is seeing the best month since early 2022 as most of the major central banks appear at the tail end of their tightening cycles,” says Edward Moya, Senior Market Analyst at OANDA.
“The crude demand outlook is getting a boost on soft landing hopes for the US and Europe. The ace up the sleeve of oil bulls is that the energy market is still awaiting massive stimulus from China that should boost global growth prospects,” adds Moya.
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