WTI bounces from 10-day SMA on Saudi Aramco’s comments

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  • WTI oil tick higher in Asia as Saudi’s Aramco sees recovery in demand. 
  • Iraq plans to cut output in August and September. 

Oil giant Saudi Aramco’s upbeat comments on potential demand conditions look to be powering gains in the black gold on Monday. 

At press time, West Texas Intermediate (WTI), the North American oil benchmark, is trading at $41.67 per barrel, having defended the 10-day simple moving average (SMA) support of $41.27 a couple of hours ago. 

Saudi Aramco’s Chief Executive Amin Nasser said on Sunday that oil demand is likely to rebound in Asia with the gradual easing of coronavirus lockdown restrictions. “Look at China, their gasoline and diesel demand is almost at pre-coronavirus levels. We are seeing Asia is picking up and other markets (too),” Nasser said, according to Reuters. 

Additional optimism may be stemming from Iraq’s plans to cut its oil production by 400,000 barrels per day in August and September to compensate for the oversupply of the past three months. Iraq’s oil minister Ihsan Abdul Jabbar said on Friday that his country is committed to cut supply in August and September under an OPEC+ supply pact. 

Looking forward, the black gold remains vulnerable to potential risk aversion in the global equities due to lingering coronavirus concerns and political deadlock in Washington over an additional coronavirus support package. 

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