Oil rises 1% on Optimistic View of Demand From Aramco

Oil prices rose on Monday, supported by Saudi optimism about Asian demand and an Iraqi pledge to deepen supply cuts, but uncertainty over an agreement to support the US economic recovery limited the gains.

By 0641 GMT, Brent crude futures were up 34 cents or 0.8%, to $ 44.74 a barrel, while U.S. West Texas Intermediate crude futures advanced 47 cents, or 1.1%, to $ 41.69.

Both were lower on Friday, weighed by concerns about demand, but Brent ended the week up 2.5%, while West Texas rose 2.4%.

“The weekend comments from Aramco are now the driver,” said Michael McCarthy, market strategist at CMC Markets.

Amin Al-Nasser, CEO of Saudi Aramco, said on Sunday that he had noticed a pick-up in demand in Asia as economies gradually reopened following coronavirus lockdowns.

On the supply side, Iraq said on Friday that it would cut its oil production by another 400,000 barrels per day in August and September to compensate for over-targeted production in the last three months, which would help it adhere to its share of the cuts of OPEC+.