Oil rises as investors bet on tight supplies

On Monday, oil prices continued their upward trajectory, building on recent gains amid various factors including anticipated declines in supplies due to OPEC+ production cuts, attacks on Russian refineries, and positive data from the Chinese manufacturing sector, signaling improved demand.

As of 0331 GMT, Brent crude prices climbed by 29 cents, or 0.3 percent, reaching $87.29 a barrel, following a 2.4 percent increase last week. Similarly, West Texas Intermediate (WTI) crude rose by 31 cents, or 0.4 percent, to $83.48 a barrel, after experiencing a 3.2 percent rise last week.

Trading volumes were expected to be subdued on Monday due to the observance of the Easter holiday in several countries.

Russian Deputy Prime Minister Alexander Novak announced on Friday that Russian oil companies would prioritize reducing production over exports in the second quarter of the year. This decision aims to ensure equitable distribution of production cuts among other OPEC+ member states.

Furthermore, drone attacks targeted several Russian oil refineries, leading to expectations of reduced Russian fuel exports.

In addition to these supply-side factors, oil prices received a boost after an official factory survey revealed on Sunday that manufacturing activity in China expanded for the first time in six months in March. This positive data indicates growing demand for oil in the world’s largest crude importer, despite ongoing challenges in the real estate sector impacting the Chinese economy.