Crude oil prices continued their gains yesterday, with WTI futures returning to the level of $82 per barrel, in addition to the rise of Brent crude oil to $85.53 per barrel, which is the highest level since April 19.
As for this morning, US oil trimmed its gains slightly, returning to the level of $81.5 a barrel, coinciding with the decline of Brent crude, which fell towards the level of 85.05, at 5:50 GMT.
These gains for oil prices come in anticipation of the next meeting of the Organization of Petroleum Exporting Countries (OPEC) on Friday, with Saudi Arabia expected to continue its voluntary reduction of its oil production.
While the Kingdom pledged earlier to reduce its oil production by one million barrels per day during last July.
Samer Hasn market analyst and part of the research team at XS.com said, “In China, expectations of the private sector obtaining more government support also boosted the rises in the oil markets, with the Chinese authorities talking again and their emphasis on continuing to study and formulate policies, after the meeting of the Executive Committee of the ruling party last week and the talk about supporting the private sector and families.
“These expected support packages would help the Chinese economy – the world’s largest oil importer – to overcome deflation and avoid recession.
“The reassurances come from the Chinese authorities to provide support after the mixed PMI figures for July.
“We witnessed a slowdown in manufacturing activities with the manufacturing PMI reading at 49.3 indicating a contraction in manufacturing activities, but this reading was slightly better than expected at 49.2.
“It is also the highest reading since last April. The services PMI figures also came in below expectations with a reading of 51.5, the lowest reading since January of this year.”