Futures Movers: Oil prices bounce after snapping streak of 7 straight weekly wins

Posted By: EN Todayon: August 21, 2023In: General Energy News, Oil & Gas News

Oil futures rose early Monday, after ending a streak of seven straight weekly gains, with underlying support tied to production cuts led by Saudi Arabia.

Price action

West Texas Intermediate crude for September delivery
CL.1,
+1.33%

CLU23,
+1.33%
rose 91 cents, or 1.1%, to $82.16 a barrel on the New York Mercantile Exchange.
October Brent crude
BRN00,
+1.01%

BRNV23,
+1.01%,
the global benchmark, was up 84 cents, or 1%, at $85.64 a barrel on ICE Futures Europe.
Back on Nymex, September gasoline
RBU23,
-0.41%
rose 0.9% to $2.849 a gallon, while September heating oil
HOU23,
+0.37%
added 0.6% to $3.146 a gallon.
September natural gas
NGU23,
+2.39%
jumped 3.4% to $2.638 per million British thermal units.

Market drivers

WTI and Brent last week fell more than 2%, for the first weekly declines since June. Analysts blamed worries over China’s economy, amplified by the country’s property-sector woes, for part of the decline. An accompanying rise by the U.S. dollar was also seen acting as a headwind for crude and other commodities.

Crude has rallied this summer in a move attributed in large part to tightening supplies. Saudi Arabia implemented a production cut of 1 million barrels a day in July and has said it would be extended through September.

Meanwhile, a consistent run of strong U.S. economic data has raised fears the Federal Reserve may need to push interest rates higher than previously expected and hold them there for longer than previously anticipated, while weekly government data last week showed a pullback in consumer fuel demand and a post-pandemic high in U.S. crude production, analysts at Sevens Report Research said in a note.

“Looking ahead, news flow will have to improve substantially for oil to resume the summer rally as hopes for a soft landing have been seen fading while concerns about the global economy are on the rise,” they wrote.