Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil Up, Finishes August Strong Despite Oversupply Fears

Published 08/31/2020, 12:19 AM
Updated 08/31/2020, 12:21 AM
© Reuters.

© Reuters.

By Gina Lee

Investing.com – Oil was up on Monday morning in Asia, with global stimulus measures continuing to support prices but with gains capped over creeping fears of an oversupply.

Brent oil futures rose 0.61% to $46.09 by 12:17 AM ET (5:17 AM GMT) and WTI futures were up 0.40% to $43.14.

Hurricane Laura, which struck the Gulf of Mexico region during the previous week, had a weaker impact on oil markets than feared, with the region’s offshore platforms and refineries that were shut down during the storm continuing to restore operations.

A weak dollar was also supporting oil, but sluggish fuel demand recovery as the number of COVID-19 cases continues to rise and fears of an oversupply dampened investor sentiment.

Some investors warned of hurdles ahead for the black liquid.

“We believe that the impact of a cheaper dollar from current levels will see a minimal impact on crude purchases, irrespective of slightly more favorable crude pricing... the relationship between demand and price elasticity is blunted in the current environment, because oil is already cheap and readily available and there currently exist a dearth of buyers,” RBC Capital’s Mike Tran said in a note.

Tran's warning was supported by data from Refinitiv and Vortexa forecasting that Chinese crude oil imports in September will fall for the first time in five months.

Meanwhile, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman Al-Saud reportedly said on Sunday that Saudi Aramco (SE:2222) discovered two new oil and gas fields, Abraq al-Toloul oil field and Hadabat al Hajara gas field, in the country’s northern regions.

Latest comments

supply will continue to be a problem in the US until portions of fields hit the decline curve, but we are headinf that way. Coast any new completions til the end of the year amd 2021 should be a decent, not great, recovery.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.