Oil price rises to seven-week high

- REUTERS, LONDON

Aug 29, 2018-

The oil price rose towards its highest since early July on Tuesday, thanks to evidence of still-modest increases in output from Opec and improving Chinese refining demand.

Brent crude oil futures were at $76.65 a barrel by 0913 GMT, up 44 cents from their last close and at their highest since July 11, while US crude futures were up 17 cents at $69.04 a barrel.

The monitoring committee of the Organisation of the Petroleum Exporting Countries (Opec) found that oil producers participating in a supply-reduction agreement, which includes non-Opec member Russia, cut output in July by 9 percent more than called for.

Investors are now more confident that supply is likely to fall short of demand in the coming months, as reflected by a narrowing in the discount, or spread, between the October and November Brent futures contracts to around 26 cents a barrel, half of what it was a month ago.

“We were of the view earlier that we are expecting prices to edge a bit lower over the rest of this year, but I struggle to see that. I see the market remaining well supported, with potential shocks to the upside, depending on what we get from Iran,” ING commodities strategist Warren Patterson said.

Opec and its partners agreed in late 2016 to cut output from 2017 by around 1.8 million barrels per day (bpd) versus October 2016 levels.

The oil price fell towards $70 a barrel last week.

Published: 29-08-2018 08:09

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