Commodity Market: US Crude Oil rebounds due to Aramco’s optimistic demand outlook, Iraq’s pledge to cut supply

After two straight days of losses, futures on US West Texas Intermediate Crude Oil rebounded on Monday, as support was drawn from both an optimistic outlook for demand in Asia and a pledge by Iraq to increase output cuts.

Amin Nasser, Saudi Aramco’s Chief Executive Officer, said over the past weekend that oil demand in Asia was rebounding due to relaxation of coronavirus-related lockdown measures and gradual re-opening of economies.

“Comments from the weekend from Aramco are the driver at the moment,” Michael McCarthy, market strategist at CMC Markets, said. Nasser “painted a rosy picture on the outlook for demand in the Asian region,” McCarthy added.

In terms of supply, Iraq announced last Friday that it would slash oil production by additional 400,000 barrels per day in August and September in order to make up for overproduction in May, June and July. After the planned larger reduction, Iraq’s total cut in production will equal 1.25 million barrels per day in August and September.

As of 8:20 GMT on Monday WTI Crude Oil Futures were gaining 0.79% to trade at $41.86 per barrel, while moving within a daily range of $41.25-$41.88. WTI Crude Futures rose 1.54% in July, which marked their third straight month of gains. US Oil surged another 2.70% during the first week of August, marking its best performance since late June.

Brent Oil Futures were gaining 0.54% on the day to trade at $44.88 per barrel, while moving within a daily range of $44.41-$44.92. Brent Oil Futures rose 4.86% in July, which marked their fourth consecutive month of advance. UK Oil surged another 2.34% during the first week of August, or the best performance since late June.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $41.61
R1 – $42.12
R2 – $42.72
R3 – $43.23
R4 – $43.75

S1 – $41.01
S2 – $40.50
S3 – $39.90
S4 – $39.31

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $44.74
R1 – $45.18
R2 – $45.72
R3 – $46.16
R4 – $46.60

S1 – $44.20
S2 – $43.76
S3 – $43.22
S4 – $42.68