Oil prices edged down on Monday, but were still near their highest levels since mid-April after top producers Saudi Arabia and Russia pledged to keep supplies down for another month to tighten global markets further and support prices.
Brent crude futures slipped 10 cents, or 0.1%, to $86.14 a barrel by 0420 GMT, while U.S. West Texas Intermediate crude was at $82.73 a barrel, down 9 cents, or 0.1%.
Both contracts notched their sixth consecutive weekly gains last week, the longest winning streak since December 2021 to January 2022.
“The bullishness is in line with our expectations of a stronger second half for oil compared to the first half,” said Suvro Sarkar, lead energy analyst at DBS Bank.
“But we think further upside may be limited and oil prices could consolidate around the $85 a barrel level (Brent) for a while, capped by ongoing concerns about the pace of China’s recovery and doubts about how long Saudi and Russia will continue to curb production and exports, respectively, given the spare capacity on hand.”
Oil prices have in recent weeks been underpinned by expectations of U.S. interest rate hikes tapering off, a reduction in OPEC+ supplies and hopes of stimulus boosting oil demand recovery in the world’s top crude importer China after a dismal second quarter.