Oil up on Monday

Oil prices have rebounded from their lowest levels since 2021, following a significant weekly decline that brought oil futures close to oversold territory. Brent crude moved towards $72 per barrel, and West Texas Intermediate (WTI) climbed above $68, following a nearly 10 per cent drop last week due to weaker demand from the US and China.

This week, traders focus on weather risks, including a potential hurricane in the Gulf of Mexico that may disrupt oil production. Reports from OPEC+, the Energy Information Administration (EIA), and the International Energy Agency (IEA) will provide updates on the demand outlook, alongside insights from the Asia Pacific Petroleum Conference in Singapore.

Crude prices fell over the past three weeks as part of a broad market selloff, with weakness in US gasoline and European diesel markets. OPEC+ postponed plans to ease supply restrictions by two months in response to the decline. Despite this, Saudi Arabia lowered the price of its Arab Light crude for Asian buyers by 70 cents to $1.30 per barrel, reflecting continued poor demand in the region.

Morgan Stanley analysts predict Brent prices will remain around $75 per barrel for the next five quarters unless demand worsens.

Attribution: Bloomberg

Subediting: M. S. Salama