Oil Prices Rise on Hopes of US Economic Support and Inflation Cooling
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Oil prices edged higher on Monday, buoyed by expectations of further US monetary policy easing and the potential for boosted global economic growth and oil demand, as reported by Reuters.
Brent crude futures rose 0.4% to $73.20 a barrel, while US West Texas Intermediate crude futures climbed 0.5% to $69.77 per barrel.
"Risk assets, including US equity futures and crude oil, have started the week on a firmer footing," said IG markets analyst Tony Sycamore to Reuters. Sycamore attributed this to the release of cooler inflation data, which has mitigated concerns following the Federal Reserve's recent hawkish pronouncements.
Sycamore also noted that the passing of legislation to end a US government shutdown over the weekend likely contributed to the positive sentiment.
Both oil benchmarks experienced losses exceeding 2% last week, driven by concerns about global economic growth and oil demand following the Federal Reserve's cautious stance on further monetary easing. Research from Sinopec, Asia's leading refiner, indicating that China's oil consumption may peak in 2027, also weighed on prices.
However, concerns about European supply eased as reports emerged that the Druzhba pipeline, which transports Russian and Kazakh oil to several European countries, has resumed operations. The pipeline had been halted on Thursday due to technical issues at a Russian pumping station. Shipments resumed on Saturday, according to Belarus' BelTa state news agency, and Hungarian Foreign Minister Peter Szijjarto confirmed on Sunday that supplies to Hungary had restarted.
The pipeline had been carrying 300,000 barrels per day of crude before the halt.
Meanwhile, US President Donald Trump threatened to impose tariffs on European Union exports if the bloc does not increase its imports of US oil and gas. The European Commission responded by stating its willingness to discuss strengthening ties with the US, including in the energy sector.
Trump also threatened to reassert US control over the Panama Canal, accusing Panama of charging excessive fees for use of the waterway. This drew a rebuke from Panamanian President Jose Raul Mulino.
In the US, the number of operating oil rigs increased by one to 483 last week, marking the highest level since September, according to Baker Hughes data reported on Friday by Reuters.