BEIJING (Reuters) – Oil prices ticked up in Asian morning trade on Monday, as market sentiment was buoyed by positive China and U.S. economic data, as well as expectations of ongoing crude supply cuts from major producers.
Brent crude was up 17 cents, or 0.2%, at $88.72 a barrel at 0015 GMT. U.S. West Texas Intermediate crude (WTI) rose 25 cents, roughly 0.3%, to $85.80.
The sustained upward price movement comes after both contracts settled at their highest levels in more than half a year last week, breaking a two-week losing streak.
On the demand side, China’s manufacturing activity unexpectedly expanded in August, data from Caixin’s manufacturing PMI survey indicated, leading to renewed optimism about the economic health of the world’s largest oil importer.
A series of economic support measures announced by Beijing last week, such as deposit rate cuts at some of the country’s largest state-owned banks and an easing of borrowing rules for home buyers, have also supported prices.
However, investors continue to await more substantial moves to prop up the country’s embattled property sector, which has been one of main drags on the Chinese economy since its emergence from the pandemic.
In the U.S., employment data was higher than expected on Friday, with nonfarm payrolls increasing by 187,000 jobs last month.
A broader cooling of the U.S. labour market, as seen in slowing job growth, reduced the chances of further rate hikes by the Federal Reserve in the immediate future, analysts said.
Expectations of tightening oil supplies have grown after Russian Deputy Prime Minister Alexander Novak’s remarks on Thursday that Russia had agreed with partners in the Organization of the Petroleum Exporting Countries (OPEC) on the parameters for continued export cuts. An official announcement with details of the planned cuts is expected this week.
Russia has already said it will cut exports by 300,000 barrels per day (bpd) in September, following a 500,000 bpd cut in August. Saudi Arabia is also expected to roll over a voluntary 1 million bpd cut into October.
(Reporting by Andrew Hayley; Editing by Jamie Freed)