Oil closes higher as OPEC’s report eases demand woes

Following OPEC’s monthly market report, which allayed fears about declining demand and a US investigation into Russian oil sanctions violations, WTI crude oil prices rose by 1.43% on Monday.

US West Texas Intermediate crude futures gained 1.4% to settle at $78.40 per barrel, while Brent crude futures increased by 1.29% to $82.47 per barrel. In its report, OPEC noted the unfavourable perception of Chinese demand, which led to an increase in demand growth projections for this year but no change for the following.

A crackdown on Russian oil exports by the US Treasury Department resulted in notices to ship management companies requesting information on 100 vessels that may have violated Western sanctions against Russian oil.

According to US Energy Information Administration (EIA) forecasts, demand will decline and US crude oil production will rise slightly less than anticipated this year.

Weak economic data from China and Chinese refiners asked for less supply for December from Saudi Arabia, the world’s largest exporter. However, oil prices may have found a bottom after a 4% drop last week and their first three-week declining streak since May.

KSA and Russia, part of the OPEC+ group, will likely continue with voluntary supply cuts into next year, limiting downside potential. The next OPEC+ meeting is scheduled for November 26.