Oil prices experienced a slight decline on Monday, influenced by several factors such as a stronger U.S. dollar and economic apprehensions in China. However, the continued commitment to supply cuts by Saudi Arabia and Russia managed to maintain Brent crude above the $90 per barrel mark.
As of 0644 GMT, Brent crude dipped by 15 cents, which represented a 0.2% decrease, settling at $90.50 per barrel. Meanwhile, U.S. West Texas Intermediate crude recorded a price of $87.08 per barrel, down by 43 cents or 0.5%.
The concerns surrounding the Chinese economy had a noticeable impact on commodities, as noted by ANZ analysts. They highlighted that these concerns were further exacerbated by the strengthening of the U.S. dollar, which had been on an upward trajectory for eight consecutive weeks.

Oil prices had been on an upward trend in the previous two weeks, reaching their highest point since November. This surge was propelled by an announcement from Saudi Arabia and Russia indicating their intention to extend voluntary supply cuts totaling 1.3 million barrels per day until the end of the year.
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Barclays analyst Amarpreet Singh remarked that while oil prices had largely aligned with their fair value estimate, Saudi Arabia’s more aggressive approach with unilateral cuts, coupled with sustained demand, cautioned against underestimating the recent price surge.
The International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC) are poised to release their monthly reports this week. Any indication of robust demand within these reports is likely to exert upward pressure on oil prices.
Mukesh Sahdev, who heads downstream and oil trading at Rystad Energy, emphasized that the true impact of the Saudi-led cuts would become clearer by year-end. This assessment would coincide with the conclusion of refinery maintenance and the subsequent increase in production.
Sahdev elaborated that refinery maintenance would reduce crude demand by 2-2.5 million barrels per day in September and October. However, it was expected to rebound in November and December, partially offsetting the price effects of the cuts. Sahdev estimated that refinery outages would peak at 10 million barrels per day in October.
In the United States, last week saw the addition of an oil rig for the first time since June, according to Baker Hughes’ weekly report. Nonetheless, the total rig count remained 127 rigs, or 17%, lower than the count at the same time the previous year.
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Looking ahead, it is likely that WTI will establish a new higher trading range above $83 but below resistance at $93.50 in the coming weeks. Concerns regarding demand in China and Europe are expected to serve as limiting factors for further price increases.