By Barani Krishnan
Investing.com - Crude prices rose Monday, helped by a broad commodities rally and a media report suggesting that OPEC+ members were pulling their weight in complying with the alliance’s production cuts.
A panel of the Saudi-steered and Russia-assisted Organization of the Petroleum Exporting Countries and its allies will meet Wednesday to review the market amid efforts to roll back some two million barrels from production cuts of around 9.6 million barrels per day agreed to in May.
A Reuters report on Monday, quoting two OPEC+ sources, said the group members’ compliance with cuts was seen at around 97% in July.
New York-traded West Texas Intermediate, the benchmark for U.S. crude futures, settled up 88 cents, or 2.1%, at $42.89 per barrel.
London-traded Brent, the bellwether for global crude prices, closed the New York session up 57 cents, or 1.4%, at $45.37.
Crude prices were also helped by the broader outperformance of commodities amid plunging yields on the U.S. 10-Year Treasury note and the slide of the Dollar Index.
Yields on the 10-year note initially plunged 5% on Monday, before recovering slightly to show a deficit of 3.8% late afternoon in New York.
The dollar index, which pits the greenback against a basket of six currencies, was down to as low as 92.75 earlier in the day before stabilizing to 92.85.
China is living up to its end of the trade deal the two parties signed in January, U.S. President Donald Trump said Monday, even though the nation has fallen short so far of promised purchases of U.S. products, Reuters reported. Chinese state-owned oil firms have tentatively booked tankers to transport at least 20 million barrels of U.S. crude for August and September.
The U.S. Energy Information Administration’s estimates of unexpectedly strong crude stockpile draws at home have also kept oil supported, despite the International Energy Agency forecasting a weaker global outlook for fuels amid the Covid-19 outbreak.