Oil prices rose on Monday, helped by expectations of strong demand and a belief that a key producer group will not turn on the spigots too quickly, reversing initial losses caused by China's release of fuel reserves, the world's largest energy consumer.
"Fundamentals have not changed, and the oil market will remain tight in the near term," said Stephen Brennock of oil brokerage PVM Oil.
Oil rose to multi-year highs last week, aided by a post-pandemic demand rebound and the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, sticking to monthly production increases of 400,000 barrels per day (BPD), despite calls from major consumers for more oil.
Analysts expect OPEC+ to stick to that number at its Nov. 4 meeting, with members Kuwait and Iraq recently expressing support for it, saying those volumes were adequate.
US President Joe Biden urged major G20 energy-producing countries with spare capacity to increase output to ensure a stronger global economic recovery on Saturday, as part of a broader effort to put pressure on OPEC+ to supply.
Prices rose despite China releasing gasoline and diesel reserves to increase market supply and support price stability in some regions, according to a rare official statement.
Boosted by rising oil prices, U.S. energy firms added oil and natural gas rigs for the 15th month in a row in October, bringing the total to the highest level since April 2020, according to Baker Hughes, an energy services firm.
Exxon and Chevron are looking to add drilling rigs in the Permian shale basin after drastically reducing crews and output there last year, the companies announced on Friday.