Oil prices were set to post their biggest monthly gains in more than a year on July 31, on expectations that Saudi Arabia will extend voluntary output cuts into September and tighten global supply.
Brent crude futures rose 74 cents higher to $85.73 a barrel by 1314 GMT, while U.S. West Texas Intermediate crude climbed 98 cents to $81.56 a barrel, rising more than $1 earlier in the session.
The September Brent contract will expire on July 31. The more active October contract was 89 cents higher at $85.30 a barrel.
Brent and WTI settled on July 28 at their highest levels since April, gaining for a fifth straight week, as tightening oil supplies globally and expectations of an end to U.S. interest rate hikes supported prices.
Both are on track to close July with their biggest monthly gains since January 2022.
Meanwhile, Saudi Arabia is expected to extend a voluntary oil output cut of 1 million barrels per day (bbl/d) for another month to include September.
"There is bull-twitch in the market’s antenna, something which Saudi will most definitely look to aggravate with a roll in their production cut," said PVM analyst John Evans.
"Oil will again enjoy a beginning of the month firmness that it has done for the last three cycles before global economic news comes to keep it in check," he added.
Riyadh's existing cuts have already constrained supplies, with oil inventories beginning to fall in some regions—the United States in particular—as demand outpaces supply.
"Oil prices are up 18% since mid-June as record high demand and Saudi supply cuts have brought back deficits, and as the market has abandoned its growth pessimism," Goldman Sachs analysts said in a July 30 note.
The bank estimated that global oil demand rose to a record 102.8 million bbl/d in July and it revised up 2023 demand by about 550,000 bbl/d on stronger economic growth estimates in India and the U.S., offsetting a downgrade for China's consumption.
However, a Reuters poll of 37 economists and analysts on July 31 forecast oil prices to stall this year as high interest rates curb demand, offsetting the impact of OPEC+ production cuts on supply.
The survey predicted front month Brent oil would average $81.95 a barrel in 2023, down from June's $83.03 consensus.
Recommended Reading
Dividends Declared in Weeks of March 17, 24
2025-03-28 - Here is a compilation of dividends declared from select upstream and midstream companies during the weeks of March 17 and March 24.
Energy Technology Startups Save Methane to Save Money
2025-03-28 - Startups are finding ways to curb methane emissions while increasing efficiency—and profits.
Burgum: US Electrons are ‘Mission Critical’ in Cyber War with China
2025-03-28 - Natural gas will play a key role in feeding energy to tech providers like Microsoft Corp. as China innovates in the AI arms race at breakneck speed, Interior Secretary Doug Burgum said at CERAWeek by S&P Global.
Gradient: Geothermal Adds Value for Old, Existing Oil Wells
2025-03-27 - When geothermal piggybacks onto oil and gas operations, ‘the economics generally look really good,’ Gradient Geothermal CEO says.
BP to Sell Downstream Business in Austria
2025-03-27 - The sale, expected to be complete by year-end 2025, includes over 260 of BP’s retail sites across Austria.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.