Oil futures ended higher on Monday, buoyed by bullish comments about demand from the world's largest oil company’s CEO and positive data from China.
West Texas Intermediate Crude Oil for September delivery
rose 72 cents, or 1.8%, to close at $ 41.94 a barrel on the New York Mercantile Exchange while the global benchmark was October Brent crude
gained 59 cents or 1.3% and closed ICE Futures Europe at $ 44.99 a barrel.
Amin Nasser, chief executive of Saudi Aramco, said over the weekend there had been a "partial recovery" in demand, praising a strong recovery in crude oil appetite in major markets, including what he saw as a return to pre-COVID-19 demand levels designated for gasoline and diesel fuel in China, the world's largest energy consumer, according to news reports. The net income of the majority state-owned company fell by 50% in the first half of the year.
"The rosy outlook for demand, coupled with Iraq's statement that it will cut production by an additional 40,000 barrels a day over the past three months to make up for overproduction, overshadows Washington's economic slowdown, at least for now," said Fiona Cincotta, analyst at City Index, in a note.
After the White House and Democratic lawmakers failed to reach an agreement last week on a new round of coronavirus aid, Trump signed the executive order on Saturday to halt wage tax collection, help with rent, assist with student loan payments and to extend part of the additional unemployment benefit that expired at the end of last month. The measures are almost certain to face legal challenges and logistical hurdles, but may be viewed as a negotiator. Both House Speaker Nancy Pelosi, D-California, and Treasury Secretary Steven Mnuchin said they were ready to resume talks.
China's consumer price index rose 2.7% year-over-year in July, compared with 2.5% in June as recent pork price hikes and flooding in southern China pushed food prices higher. The increase was in line with forecasts. Producer prices fell 2.4% year over year in July, after falling 3% in June according to the National Bureau of Statistics. Economists surveyed The Wall Street Journal had predicted that industrial prices would fall 2.6%.
In the other energy trade September gasoline
gained 2.17 cents, or 1.8%, to end at $ 1.2293 a gallon while heating oil in September
rose 1.7 cents, or 1.4%, to finish at $ 1.2369 a gallon.
Natural gas for delivery in September
declined 8.5 cents, or 3.8%, to $ 2.1530 per million British thermal units.