Oil futures rose on Monday following Saudi Arabia's decision to increase June crude prices for most regions. Concerns about the Israel-Hamas conflict potentially escalating further in the key oil-producing region also supported the uptick.
Brent crude futures climbed by 0.4% to reach $83.30 a barrel, while U.S. West Texas Intermediate crude futures stood at $78.45 a barrel, up by the same percentage.
Saudi Arabia's move to raise the official selling prices (OSPs) for its crude in June, particularly to Asia, Northwest Europe, and the Mediterranean, indicates anticipation of robust summer demand.
Warren Patterson, ING's head of commodities research, noted that after a 7.3% decline last week due to eased geopolitical tensions, ICE Brent began the new trading week on a stronger note. This adjustment followed Saudi Arabia's increase in June OSPs for most regions amid a tightening of supplies this quarter.
In China, the world's leading crude importer, service activity continued to expand for the 16th consecutive month, with accelerated growth in new orders and solid improvement in business sentiment, raising hopes for a sustained economic rebound.
Both Brent and WTI futures experienced their most significant weekly losses in three months the previous week, with Brent dropping over 7% and WTI down 6.8%, as investors assessed weak U.S. jobs data and speculated about the timing of a Federal Reserve interest rate cut.
Geopolitical risk in oil prices has diminished as talks for a Gaza ceasefire progress.
In a sign of potential supply tightening, U.S. energy companies reduced the number of oil and natural gas rigs in operation for the second consecutive week. Oil rigs decreased by seven to 499, marking the largest weekly drop since November 2023, according to Baker Hughes' report on Friday.
Paraphrasing text from "Reuters" all rights reserved by the original author.
