ISLAMABAD
Oil prices surged over one percent on Tuesday despite a stronger US dollar as investors turn attention from the US Consumer Price Index (CPI) data for August to supply outlook.
As of 1300 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $1.01 (+1.11 percent) to reach $91.65 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $1.15 (+1.32 percent) to $88.44 a barrel.
Similarly, the price of Russian Sokol increased by $0.44 (+0.52 percent) to $84.92. Arab Light prices witnessed an increase of $0.53 (+0.56 percent) to reach $94.79 a barrel. On the other hand, the price for Opec Basket slipped to $92.84 with a decrease of $0.13 (-0.14 percent). The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
With this fresh increase in prices, both Brent and WTI are trading above the 10-month highs. Earlier, the prices surged after Saudi Arabia and Russia said they would extend supply cuts of a combined 1.3 million barrels per day to the end of the year.
As part of their voluntary cuts, Saudi Arabia is extending its one million bpd output reduction until December, while Russia is rolling over its export cut of 300,000 bpd until the end of the year.
On the other hand, China’s crude oil imports in the first eight months of the year rose by nearly 15 percent from the same period last year. The country, the world’s top importer of oil, has been taking steps to boost the country’s sluggish economy.
There are concerns about a demand slump due to sluggish economic growth in China, the world’s second largest economy and top oil importer. China’s economy expanded an annual 6.3 percent from April to June, after growing 4.5 percent in the previous three months, according to the latest data from the National Bureau of Statistics.
China’s services activity grew at the slowest pace in eight months in August amid weak demand, a private sector report said on Tuesday.
Internationally, the US dollar regained some lost ground during trading on Tuesday. US inflation data for the month of August was due on Wednesday, with traders on the lookout for whether the world’s largest economy was indeed on track for a “soft landing” and whether the Fed has further to go in raising rates. The US dollar index, which ended last week with an eight-week winning streak, rose 0.03% to 104.60, after falling 0.46% in the previous session. Sterling steadied at $1.2508.
