Oil futures rose Monday, on track to end August on an upbeat note after data showed a stronger-than-expected pickup in China’s service sector.
“The move follows moderate week-on-week gains during last week’s trading, with continued improvement to global demand levels combining with a weaker dollar and ongoing supply cuts to offer support to [a] market that still holds plenty of downside risk,” said Robbie Fraser, senior commodity analyst at Schneider Electric.
“Near-term, some positive economic numbers out of China and broader support for equities has further boosted oil market sentiment,” he said in a daily note. “Additionally, last week saw a further decline in U.S. oil rigs, and Hurricane Laura generally avoided energy infrastructure, easing concerns that damage to refineries could curb crude demand.”
In Monday dealings, West Texas Intermediate crude for October delivery CL.1,
Based on the most actively traded contracts, U.S. benchmark WTI crude was on track for a monthly gain of over 7%, which would represent a fourth straight monthly climb. Brent, the global benchmark, was headed for a more than 5% rise, on track to tally a fifth monthly climb in a row. Oil’s gains have accompanied a global rally in equities that has the U.S. market on track for its strongest monthly gain in more than three decades, as well as a sliding U.S. dollar.
The Organization of the Petroleum Exporting Countries and their allies, known as the OPEC+ alliance of producers, has largely complied with its self-imposed production curbs. Meanwhile, the U.S. dollar has continued to weaken versus major rivals, with the ICE U.S. Dollar Index DXY,
Meanwhile, oil bulls were cheered by data out of China. The country’s official nonmanufacturing purchasing managers index rose to 55.2 in August, up from 54.2 in July, the National Bureau of Statistics said Monday. The August reading was the sixth consecutive expansion after the gauge in February was fell well below the 50 mark, which separates expansion from contraction.
Back on Nymex, September gasoline traded at $ 1.294 a gallon, down 1.6%, and September heating oil lost 0.7% to $ 1.2073 a gallon, ahead of the expiration of the contracts at the day’s settlement. As of Friday, gasoline futures traded up by nearly 11% and heating oil was down by nearly 0.1% for the month, based on front-month contract prices, according to Dow Jones Market Data.
October natural gas NGV20,
