Oil rises as Saudi cuts spark supply fears

Bloomberg

Crude rose after Saudi Arabian production cuts heightened concerns about tightening worldwide supplies.
Futures in New York advanced as much as 1.6 percent on Monday. Saudi Arabia reduced oil production to about 10.3 million barrels a day in July, according to delegates in the Organization of Petroleum Exporting Countries. The kingdom told the group it had pumped 10.489 million barrels a day in June.
Labour strikes resumed in the North Sea, fuelling worries about an additional supply hitch.
Meanwhile, the strengthening US dollar threatened crude’s rally.
“Reports that the Saudi output in July had dropped, seemed to catch a bid in the market,” said Gene McGillian, manager of market research at Tradition Energy. “The dollar continues to climb and that’s starting to put some selling pressure on oil.”
The US benchmark crude hasn’t recovered from a July retreat triggered by the US-China trade spat that imperiled demand for energy in the world’s biggest economies. Despite the Saudi production cut, investors are waiting for clearer indications of the global supply situation after Russia’s largest oil producer said it has the capacity to continue lifting output.
West Texas Intermediate crude for September delivery rose 70 cents to $69.19 a barrel on the New York Mercantile Exchange. Total volume traded was about 33 percent below the 100-day average.
Brent for October settlement added 42 cents to $73.63 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $5.62 premium to WTI for the same month.