Oil holds above $80/bbl on OPEC+ cuts, traders eye China recovery

Oil prices edged up slightly on Monday, supported by OPEC+’s plans to cut more output, while investors eyed Chinese economic data for signs of a demand recovery by the world’s No. 2 oil consumer.

Brent crude futures nudged 6 cents higher to $86.37 a barrel by 0350 GMT, while U.S. West Texas Intermediate crude was at $82.56 a barrel, up 4 cents.

Both contracts notched their fourth weekly gains last week – the longest-such streak since mid-2022 – after the International Energy Agency (IEA) forecast record demand in 2023 of 101.9 million barrels per day (bpd), up 2 million bpd on last year.

However, the IEA warned in its monthly report that the output cuts announced by OPEC+ producers risked exacerbating an oil supply deficit expected in the second half of the year and could hurt consumers and a global economic recovery.

Rising costs for Middle East crude supplies, which meet more than half of Asia’s demand, are already squeezing refiners’ margins, prompting them to secure supplies from other regions.

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