Oil prices edged higher on Monday, recouping some of the losses suffered at the end of last week, as investors focused on the prospect of tight global supplies and a last-minute deal to avert a U.S. government shutdown restored risk appetite.
Brent crude futures for December were up 25 cents, or 0.3%, at $92.45 a barrel by 0415 GMT, after falling 90 cents on Friday. Brent November futures fell 7 cents to $95.31 a barrel when the contract expired on Friday.
U.S. West Texas Intermediate crude futures rose 29 cents, or 0.3%, to $91.08 a barrel after falling 92 cents on Friday.
Both benchmarks rose nearly 30% in the third quarter as Saudi Arabia and Russia extended additional production cuts until the end of the year, anticipating a significant shortage of crude supplies in the fourth quarter.
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Four OPEC+ sources told Reuters that the Organization of the Petroleum Exporting Countries, Russia and other allies (OPEC+) are unlikely to adjust its current oil output policy when a joint ministerial monitoring committee meets on Wednesday, as tighter supplies and rising demand push rising oil prize.
“OPEC+ is not expected to change policy due to supply concerns, while this week’s avoidance of a U.S. government shutdown also brought some relief,” said Hiroyuki Kikukawa, president of Nissan’s NS Trading Securities.
“However, whether the market will rise further will depend on future demand trends,” he said.
ING analysts said in a report on Monday that OPEC+ is not expected to change its output policy given recent market strength, but Saudi Arabia may begin to relax an additional 1 million barrels per day of voluntary production cuts.
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“Saudi Arabia said it is still worried about Chinese demand. However, PMI data released over the weekend will provide some confidence that China’s September manufacturing PMI will return to the expansion range for the first time since March.”
China’s factory activity expanded for the first time in six months in September, official data showed on Saturday, as a range of indicators suggested the world’s second-largest economy had begun to stabilize.
However, a private sector survey on Sunday was less encouraging, showing that the country’s factory activity expanded at a slower pace in September.
Indeed, a sluggish housing market, falling exports and high youth unemployment are delaying China’s economic recovery, raising concerns about weakening fuel demand.
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Elsewhere, Republican House Speaker Kevin McCarthy’s last-minute decision to turn to Democrats to pass a short-term financing bill pushed the risk of a government shutdown to mid-November, meaning more than 4 million U.S. federal government workers can count on continuing for the time being. Pay wages.
Energy services company Baker Hughes said in its closely watched report that the number of U.S. oil and gas rigs, an early indicator of future production, fell by seven to 623 in the week ended September 29, the most since The lowest level since February 2022, exacerbating supply concerns. Friday.
Brent crude prices are expected to be $89.85 a barrel in the fourth quarter and $86.45 a barrel in 2024, according to the survey of 42 economists. Reuters on Friday.