Global oil prices edged higher Monday as dealers digested an upbeat market assessment from the OPEC crude producers’ cartel.
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China announced its own stimulus plan today, sending Asian stocks sharply higher.
Oil was also supported by a weaker USA dollar, since it makes imports for countries using different currencies cheaper.
Chicago Federal Reserve Bank President Charles Evans will speak on the monetary policy in Chicago at 10:30 am ET.
Data from oil services company Baker Hughes on Friday showed US energy firms cut oil rigs for a sixth week in a row last week in a sign low prices are keeping drillers away from the well pad.
Oil prices have suffered a major blow due to oversupply.
However, recent talk of possible collaboration between members and nonmembers of OPEC has injected a few optimism into the market.
“The current rig count is pointing to US production declining sequentially between 2Q15 and 4Q15 by 255,000 barrels per day”, Goldman Sachs said in response to the data.
US oil futures this week averaged $48 a barrel, up from a $45 average last week, on concerns over Russia’s entry into the Syrian conflict and a rising Chinese stock market. ANZ Research estimates Chinas exports contracted last month, but the strong balance can offset the pressure of capital outflows. The West Texas Intermediate (WTI) oil futures are now trading at around $49 per barrel.
“This should reduce the excess supply in the market and lead to higher demand for OPEC crude”, OPEC said in the report, “resulting in more balanced oil market fundamentals”.
Such upbeat sentiment mirrors the latest projection by the U.S. Energy Department.
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Nymex reformulated gasoline blendstock for November the benchmark gasoline contract rose 1 cent to $1.43 a gallon, ICE gasoil for October changed hands at $482.50 a metric ton, up 75 cents from Fridays settlement.
