Forecasts of a supply gap resulting from peak summer gasoline demand and OPEC+ cuts in the third quarter helped oil prices rise on Monday, although gains were limited by headwinds in the global economy and rising non-OPEC+ output, as reported by Reuters.
By 10:29 a.m. Saudi time, Brent crude futures had increased by 53 cents, or 0.6 percent, to $85.53 a barrel, while US West Texas Intermediate crude futures had increased by 51 cents, or 0.6 percent, to $82.05 a barrel.
Following the extension of the severe oil supply cuts by the Organization of the Petroleum Exporting Countries (OPEC+) and their allies well into 2025, both futures saw gains of about 6% in June. In the last two weeks, Brent has settled above $85 per barrel.
Because of this, analysts projected supply shortages in the third quarter as summertime demand for air conditioning and transportation depletes gasoline reserves.
The Energy Information Administration said on Friday that prices were supported by a four-month high in April oil production and demand for main products.
In a note, ING analysts under Warren Patterson stated, “We continue to hold a supportive view toward Brent, although there are concerns around demand, such as US gasoline demand and Chinese apparent demand.”
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