A Steady Recovery in Manufacturing Of Asia and Europe Supported Oil Prices

Oil prices stabilized on Monday as positive manufacturing data in Europe and Asia offset oversupply concerns raised by rising global coVID-19 cases and expectations of cuts by Opec and its Allies, according to Arab News on Aug. 4.

Brent rose 5 cents, or 0.1 per cent, to $43.57 a barrel, while US West Texas Intermediate rose 6 cents, or 0.1 per cent, to $40.33 a barrel. Brent crude has traded between $41 and nearly $45 a barrel for the past month.

Warren Buffett, head of commodities strategy at ING, the Dutch bank, said: "I think it's fair to say that we're not going to be able to do this. "Oil continues to trade in mind-boggling ranges," said Warren Patterson, chief executive of Goldman Sachs. Speculators seem increasingly concerned about the recovery in demand, which has been much slower than the market expected in the second half of the year."

Coronavirus cases continue to climb in the United States, reaching nearly 18 million worldwide, and more countries are implementing new restrictions or expanding existing ones in an effort to contain the outbreak. While fuel demand has been slow to recover in the face of a resurgent virus, investors remain concerned about oversupply as Opec and its Allies prepare to ease supply cuts starting in August.

"The market seems to be starting to worry that an Opec production increase will coincide with an uneven recovery in oil demand," said Harry Tchilinguirian, head of commodity research at BNP Paribas.

Opec + has cut oil by 9.7 million barrels a day since May. Starting this month, the cut will officially be reduced to 7.7 million barrels a day through December.

Oil prices fell earlier in the session but found some support after a survey showed eurozone manufacturing activity expanded last month for the first time since early 2019. Positive manufacturing data from Asia also helped support oil prices.