Oil prices rose on Tuesday, extending the previous day's rally on hopes of higher seasonal fuel demand and potential U.S. crude purchases for its petroleum reserve, though gains were capped by a firmer dollar.
The crude oil market rallied slightly in the early hours on Monday, as the market digests a lot of oversold conditions, and of course the attack on shipping over the weekend.
Oil prices rose Monday after posting a loss last week in the wake of the OPEC+ decision to increase production later this year. Goldman Sachs analysts said Brent should rise to $86 in the third quarter as summer fuel demand results in a "sizeable" deficit.
Noble Corp. is buying Diamond Offshore Drilling in a deal valued at about $1.6 billion.
Oil futures saw tiny gains early Monday, attempting to find a footing after an OPEC+ decision to begin unwinding some voluntary production cuts later this year helped send crude to a third straight weekly decline.
Given the expected rise in summer transport demand and projected inventory declines, the short-term outlook for oil prices appears cautiously bullish.
Oil prices nudged lower for a second straight session on Monday, weighed down by a firmer dollar as expectations of interest rate cuts were pushed out further following strong U.S. jobs data on Friday.
Since 2008, the shale boom has grown U.S. oil production by about 9 million barrels per day. In the early days of the shale boom, when it wasn't clear whether this development would have a significant impact, it was largely ignored by OPEC.
Shares were trading around 28.25 Saudi riyals ($7.53) on the Tadāwul Saudi stock exchange at 11:30 a.m. local time (4:30 a.m.
Given the prevailing conditions and the possibility of prolonged high interest rates, the outlook for crude oil remains bearish for the coming week.
Igor Sechin, CEO of Russian energy major Rosneft said on Saturday that an increase in spare oil production capacity offset OPEC+ efforts to reduce oil output.
The oil market fell in the majority of trading at the beginning of the week. However, we have since bounced enough to show signs of strength, and this is a good sign for some kind of recovery in the summer.