Oil futures rose Monday, kicking off October on a positive note as traders focused on expectations for a further tightening of supply.
West Texas Intermediate crude for November delivery
rose 81 cents, or 0.9%, to $91.60 a barrel on the New York Mercantile Exchange.
December Brent crude
the global benchmark, was up 91 cents, or 1%, at $93.11 a barrel on ICE Futures Europe.
gained 1% to $2.424 a gallon, while November heating oil
was up 0.9% at $3.33 a gallon.
Natural gas for November delivery
dropped 0.9% to $2.904 per million British thermal units.
WTI and Brent jumped by more than 25% in the third quarter, with the U.S. benchmark last week hitting its highest close in nearly 13 months. Brent last week traded at its highest since November.
Traders this week will be paying attention to a meeting of the OPEC+ Joing Ministerial Monitoring Committee, or JMMC, on Wednesday. The panel is made up of oil ministers from members of the Organization of the Petroleum Exporting Countries and its Russia-led allies and has the authority to call for a full OPEC+ meeting if it decides one is needed.
“The market will be eager to see if there are any signs of a change in the group’s output policy, given the recent strength in the market. We do not believe that the group will change its output policy,” Warren Patterson and Ewa Manthey, commodity analysts at ING, said in a note.
Crude has rallied over the past four months, with tightening supplies taking center stage. Analysts have cited Saudi Arabia’s June decision to implement a voluntary production cut of 1 million barrels a day beginning in July — a reduction that was recently extended through the end of the year — as the primary driver for the rally.
The ING analysts held out the possibility, however, that Saudi Arabia could signal it’s ready to ease its additional cut after China’s official purchasing managers index reading for September indicated the first expansion in manufacturing activity in six months. They noted Saudi Arabia has cited uncertainty over China’s demand outlook as a factor in its decision to cut production.
The data “will provide some confidence with China’s manufacturing PMI returning to expansion territory in September for the first time since March, whilst the nonmanufacturing PMI remained in expansion territory over the month,” they wrote.