LONDON Oil prices rose on Monday as China’s plans to increase U.S. crude imports countered rising tensions between the two major consumers, and as sources said OPEC+ producers almost fully complied in July with their global production cut accord.
Brent crude rose 31 cents, or 0.7%, to $45.11 a barrel by 1357 GMT, and U.S. West Texas Intermediate crude was up 44 cents, or 1%, to $42.45 a barrel.
Firmer stock markets and a weaker dollar were also lending support, said Commerzbank analyst Eugen Weinberg.
United States and China delayed a review of their Phase 1 trade deal initially slated for Saturday, citing scheduling conflicts.
However, in a positive sign, Chinese state-owned oil firms have tentatively booked tankers to transport at least 20 million barrels of U.S. crude for August and September.
Record crude imports from the world’s top importer and the easing of COVID-19 restrictions globally have supported oil prices, although new waves of coronavirus outbreaks in several countries are expected to cool consumption again.
“Clearly the market is not tightening as quickly as initially anticipated. Demand is taking longer than expected to get back to normal levels,” ING Group said.
Investors are also keeping an eye on a ministerial OPEC+ committee, known as the JMMC, on Wednesday that will review the oil market and compliance with the global oil supply reduction pact, although no change in the agreement is expected.
In August, OPEC+ eased its agreed cuts to 7.7 million barrels per day (bpd) from 9.7 million bpd previously.
Compliance with OPEC+ oil output cuts is seen at around 97% in July, two OPEC+ sources told Reuters.
Iran’s oil minister, Bijan Zanganeh said “OPEC’s performance has been successful because the price of oil has risen from $16 in May to around $45 and has stabilised.”
In the United States the number of oil and natural gas rigs operating last week remained anchored at a record low for a 15th week, even as higher oil prices prompt some producers to start drilling again.
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