Brent Crude at Five-month High on Abu Dhabi Output Cuts

Noah Browning and Florence Tan
Monday, August 31, 2020

Oil rose on Monday, with Brent touching the highest in five months, underpinned by a 30% cut in Abu Dhabi crude supplies and encouraging Chinese data even as global demand struggles to return to pre-COVID levels in a well-supplied market.

Brent crude futures for November advanced to $46.50 a barrel by 0853 GMT up 69 cents, or 1.5%. U.S. West Texas Intermediate crude was at $43.48 a barrel, up 51 cents, or 1.2%.

Brent is set to close out August with a fifth successive monthly price rise while WTI is on track for a fourth monthly gain, having hit a five-month high of $43.78 a barrel on Aug. 26 when Hurricane Laura struck.

Abu Dhabi National Oil Company told its customers on Monday that it will reduce October supplies by 30%, up from a 5% cut in September, as directed by the United Arab Emirates government to meet its commitment on the recent OPEC+ agreement.

"With demand gradually recovering, this will allow the market to better absorb the inventory glut from earlier this year," OCBC's economist Howie Lee said.
Energy companies continued efforts to restore operations at U.S. Gulf Coast offshore platforms and refineries shut before the storm.

A weak U.S. dollar and a survey on Monday showing surprisingly strength in China's services sector supported oil prices even though fuel demand has struggled to recover amid the coronavirus pandemic and supplies remain ample, analysts say, cautioning of hurdles for crude going forward.

"Oil is likely to slowly grind higher in modest steps, not explode out of the wellhead higher," OANDA's Asia-Pacific analyst Jeffrey Halley said, adding that abundant near-term supplies and the fragility of the global recovery tempered price gains.

China's crude imports in September are set to fall for the first time in five months as record volumes of crude are stored in and outside of the world's largest importer, data from Refinitiv and Vortexa showed. 

(Reporting by Noah Browning and Florence Tan, editing by Louise Heavens)

Categories: Energy Middle East Activity Production Asia

Related Stories

Aker Solutions, PTAS JV Hooks Brownfield Services Extension off Brunei

CDWE Wraps Up Pin Pile Installation Job for Taiwanese Offshore Wind Farm

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

Azeri SOCAR Plans New Agreements with Oil and Gas Majors

Indonesia's Medco Starts Production at Natuna Sea Fields

CNOOC Sees 11% Profit Growth in 2024 Driven by Record Oil Production

‘Ultra-Mega’ Offshore Deal for L&T at QatarEnergy LNG’s North Field Gas Scheme

Valeura Wraps Up Infill Drilling Campaign in Gulf of Thailand

ADNOC Signs 15-Year LNG Supply Deal with Osaka Gas for Ruwais Project

ADNOC Secures LNG Supply Deal with India's BPCL

Current News

MODEC, Carbon Clean to Advance FPSO-Mounted Carbon Capture Tech

Aker Solutions, PTAS JV Hooks Brownfield Services Extension off Brunei

CDWE Wraps Up Pin Pile Installation Job for Taiwanese Offshore Wind Farm

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

Azeri SOCAR Plans New Agreements with Oil and Gas Majors

TPAO, SOCAR and BP to Ink Caspian Sea Oil and Gas Production Deal

Fugro Lands Deepwater Gas Field Job in Southeast Asia

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

China's Sinopec Laucnhes $690M Hydrogen Venture Capital Funds

CIP, ACEN Partner Up for First Large-Scale Offshore Wind Farm in Philippines

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com