LONDON: Oil prices rose on Monday, with Brent crude touching the highest in five months, underpinned by a 30 per cent cut in Abu Dhabi crude supplies and encouraging Chinese data even as global demand struggles to return to pre-Covid levels in a well supplied market.
Brent crude futures for November advanced to $46.50 a barrel, up 69 cents, or 1.5 per cent. US West Texas Intermediate (WTI) crude was at $43.48 a barrel, up 51 cents, or 1.2 per cent.
Brent is set to close out August with a fifth successive monthly price rise while WTI is on track for a fourth monthly gain, having hit a five-month high of $43.78 a barrel on 26 August when Hurricane Laura struck.
Abu Dhabi National Oil Company (ADNOC) told its customers on Monday that it would reduce October supplies by 30 per cent, up from a 5 per cent cut in September, as directed by the UAE government to meet its commitment on the recent OPEC+ agreement.
Meanwhile, energy companies continued efforts to restore operations at US Gulf Coast offshore platforms and refineries shut before the storm.
A weak US dollar and a survey on Monday showing surprising strength in China’s services sector supported oil prices even though fuel demand has struggled to recover amid the coronavirus pandemic and supplies remain ample, analysts said, cautioning of hurdles for crude going forward.