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Brent crude futures crept 34 cents higher to $85.33 a barrel by
0957 GMT, while U.S. West Texas Intermediate crude rose 54 cents
to $81.12 a barrel.
The September Brent contract will expire on Monday. The more
active October contract edged up 47 cents to $84.88 a barrel.
Brent and WTI settled on Friday at their highest levels since
April, gaining for a fifth straight week, as tightening oil
supplies globally and expectations of an end to U.S. interest
rate hikes supported prices.
Both are on track to close July with their biggest monthly gains
since January 2022.
Meanwhile, Saudi Arabia is expected to extend a voluntary oil
output cut of 1 million barrels per day (bpd) for another month
to include September.
"There is bull-twitch in the market’s antenna, something which
Saudi will most definitely look to aggravate with a roll in
their production cut," said PVM analyst John Evans.
"Oil will again enjoy a beginning of the month firmness that it
has done for the last three cycles before global economic news
comes to keep it in check," he added.
Riyadh's existing cuts have already constrained supplies, with
oil inventories beginning to fall in some regions - the United
States in particular - as demand outpaces supply.
"Oil prices are up 18% since mid-June as record high demand and
Saudi supply cuts have brought back deficits, and as the market
has abandoned its growth pessimism," Goldman Sachs analysts said
in a July 30 note.
The bank estimated that global oil demand rose to a record 102.8
million bpd in July and it revised up 2023 demand by about
550,000 bpd on stronger economic growth estimates in India and
the U.S., offsetting a downgrade for China's consumption.
Adding to the bullish sentiment was data on Monday that showed
that the euro zone returned to growth in the second quarter of
2023, after narrowly avoiding a technical recession around the
turn of the year.
(Reporting by Natalie Grover in London; Additional reporting by
Florence Tan in Singapore and Mohi Narayan in New Delhi; Editing
by Himani Sarkar, Christina Fincher and Louise Heavens)
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