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Saudi Arabia on Monday said it would extend its voluntary cut of
one million barrels per day (bpd) for another month to include
August, the state news agency said.
Russia, seeking to nudge up global oil prices in concert with
Saudi Arabia, will reduce its oil exports by 500,000 bpd in
August, Deputy Prime Minister Alexander Novak said on Monday,
further tightening global supplies.
Both Riyadh and Moscow have been trying to prop up prices. Brent
has dropped from $113 per barrel a year ago, sent lower by
concerns of an economic slowdown and ample supplies from major
producers.
Brent crude futures were up 0.9%, or 68 cents at $76.09 a barrel
by 1021 GMT after gaining 0.8% on Friday. U.S. West Texas
Intermediate crude rose nearly 1%, or 69 cents to $71.33, having
gained 1.1% in the previous session.
"Investors are turning upbeat as the second half of the year
kicks off; they expect tighter oil balance and buoyant equities
also suggest that recession will be avoided, albeit probably
narrowly," said PVM analyst Tamas Varga.
Prices had fallen earlier in the session after eurozone
manufacturing activity contracted faster than initially expected
in June, with persistent policy tightening by the European
Central Bank squeezing finances.
Fears of a further economic slowdown denting fuel demand had
grown on Friday as U.S. inflation continued to outpace the
central bank's 2% target and stoked expectations it would raise
interest rates again.
Higher interest rates could strengthen the dollar, making
commodities such as oil more expensive for buyers holding other
currencies.
Factory activity growth in China, the world's largest crude
importer, also slowed in June as sentiment and recruitment
cooled in sluggish market conditions, the Caixin/S&P Global
private sector survey showed.
(Reporting by Alex Lawler and Natalie Grover in LondonAdditional
reporting by Florence Tan and Emily Chow in Singapore; editing
by Jason Neely and David Goodman)
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