Oil prices slightly up on optimism over Asian demand

Oil prices slightly up on Monday backed by Saudi optimism about Asian demand and an Iraqi commitment to speeding up production cuts to offset overproduction in the previous months.

International benchmark Brent crude was trading at $44.89 per barrel at 0840 GMT for a 0.05% increase after closing Friday at $44.66 a barrel.

American benchmark West Texas Intermediate (WTI) was at $41.94 a barrel at the same time for a 0.21% increase after ending the previous session at $41.80 per barrel.

Chief Executive of Saudi Aramco, Amin Nasser, said on Sunday that he sees oil demand growing in Asia as economies slowly open up after coronavirus lockdowns have been eased, which encouraged the increase in the oil prices.

On the supply side, Iraq said it would slash its oil output by an additional 400,000 barrels per day in August and September to offset its overproduction over the past three months. The country agreed its production by 1.06 million bpd under the pact.

Saudi Arabia, de facto OPEC leader and major driver of OPEC production cuts, also said it would further cap its production to support prices.

However, the concerns over the effectiveness of the steps against the second wave of coronavirus limit the outlook for global oil production.

Globally, growing numbers of COVID-19 cases also seem to suggest that global oil consumption is likely to remain low by 2020.

The number of COVID-19 cases worldwide has now surpassed 19 million, according to the latest data from Johns Hopkins University.

As the US leads the number of cases with more than 5 million, Brazil has over 3 million, and India follows with more than 2 million cases.