Mubasher: Oil futures rose on Monday after a Houthi attack on Saudi oil facility, while markets looked for any signs of a thaw in the US-China trade dispute, Reuters reported.
However, gains were limited on the back of a bearish report by the Organization of the Petroleum Exporting Countries (OPEC), raising worries about oil demand growth.
By 9:43 am GMT, US Nymex crude futures rose by 0.56% to $55.18 per barrel (pb), while global benchmark Brent futures climbed by 0.56% to $58.97 pb.
A drone attack by Yemen's Houthi movement on an oilfield in eastern Saudi Arabia on Saturday which caused a fire at a gas plant, further exacerbating tensions in the Middle East.
Nevertheless, state-run oil giant Saudi Aramco said that oil production was not impacted.
“Oil is benefiting from an overall optimism that we won’t see the doomsday trade war scenario and after a drone attack on oil and gas facilities in Saudi Arabia reminded markets geopolitical tensions in the Middle East are going nowhere anytime soon,” New York-based OANDA senior market analyst Edward Moya was quoted by Reuters.
Meanwhile, White House economic adviser Larry Kudlow said that trade officials from Washington and Beijing would hold discussions within 10 days and could advance negotiations over putting an end to a trade row between two sides, if those discussions yield any progress.
However, US President Donald Trump struck a less optimistic tone, as he was “not ready to make a deal [with China] yet,” even if he Beijing was ready to reach an agreement.
In addition, worries about an economic recession were still dragging crude prices down, even if President Trump and senior White House officials ruled out prospects that US economic growth was slowing down.
This seemed chiming in with the fact that OPEC cut its projection for global oil consumption growth for this year by 40,000 barrels per day (bpd) to 1.10 million bpd.
The producer club also expected that the market would see a slight glut next year.
Moreover, US energy companies expanded this week the number of operating oil rigs for the first time since seven weeks, weighing on oil markets, despite plans to scale back investment in new drilling this year.
