Oil prices have edged-up as UAE’s Abu Dhabi National Oil Company (ADNOC) announced 30% cut to October supplies.
Brent crude oil futures rose by 46 cents, or 1% to $46.38 a barrel while US West Texas Intermediate (WTI) crude futures increased by 28 cents, or 0.7% to $43.25 a barrel, Reuters reported.
OCBC economist Howie Lee was quoted by the news agency as saying: “With demand gradually recovering, this will allow the market to better absorb the inventory glut from earlier this year.”
On 28 August, energy companies continued efforts to restart operations at US Gulf Coast offshore platforms and refineries shut by Hurricane Laura as oil markets largely avoided the impact of the massive storm.
According to Reuters market analyst Wang Tao, Brent crude is likely to head toward $47 a barrel and WTI “revisiting” its August high.
Oil prices were also supported by a weak US dollar.
OANDA Asia-Pacific analyst Jeffrey Halley was quoted as saying: “Oil is likely to slowly grind higher in modest steps, not explode out of the wellhead higher.”
RBC Capital’s analyst Mike Tran said that the impact of a weaker dollar from current levels would have a less impact on the purchases of crude.
Tran added: “The relationship between demand and price elasticity is blunted in the current environment, because oil is already cheap and readily available and there currently exists a dearth of buyers.”
Data released by Refinitiv and Vortexa showed that crude imports of China would fall for the “first time” in five months. This scenario is due to the reason that large volumes of crude are stored in the country.
Meanwhile, data from American energy services firm Baker Hughes reported that the current oil prices are encouraging the US producers to restart drilling activities as the country’s operating oil and gas rig count increased by three to 254 this month.