Oil markets have returned mixed results as US holiday on Monday continued to push crude prices higher, while international Brent prices witnessed a slight fall on the back of a drop in Asian stocks.
US West Texas Intermediate (WTI) crude futures continued their upward trajectory, recording an increase of 63 cents, or 1%, to trade at $62.31 a barrel, while Brent crude futures declined 13 cents, or 0.2%, to reach $65.54 per barrel, according to Reuters.
Traders opined that Friday’s gains were being pushed into Tuesday, as a result of the US holiday.
Furthermore, an increase in WTI prices was supported by ongoing supply issues caused by reductions in supply from Canada to the US.
Meanwhile, Brent crude fell in the wake of a stronger dollar and dip in Asian stocks.
Stronger dollar leads to a potential drop in demand for commodities such as oil, as countries using other currencies domestically need to pay more money for imports.
OPEC and other producers including Russia continue to enforce output cuts in a bid to curb excess global stockpiles, recording 133% compliance with the plan, which has been effective since January last year.
According to the OPEC, global oil demand for this year is set to register growth of 1.6 million barrels a day.
Rivkin Securities analyst William O‘Loughlin was quoted by the news agency as saying: “OPEC and Russia continue to support the production cuts that are due to expire at the end of this year, and they assure markets that there will be an orderly ramp-up of production once the cuts expire.”
However, efforts made by the OPEC-led group continue to face challenges from rising US production.
Indications that US crude output will further increase were confirmed by a hike in the number of US oil rigs drilling for new production last week to 798, continuing the growth for a fourth consecutive week.