Crude oil moved higher in the early morning hours
After closing the week ending on August 5 with mixed sentiment, crude oil prices gained in the early morning hours on August 8—a positive start to this week. At 6:50 AM EST on August 8, the West Texas Intermediate crude oil futures contract for September delivery was trading at $42.42 per barrel—a gain of ~1.5%. The Brent crude futures contract for October delivery was trading at $44.88 per barrel—a surge of ~1.4%.
Hopes of an output freeze support the prices
In the week ending on August 5, crude oil prices traded with mixed sentiment due to an unexpected surge in gasoline inventories. On Monday, prices gained support from speculations about renewed discussions among OPEC members regarding an output freeze. Even though there isn’t solid ground for these speculations, prices rallied in the early morning hours.
Russia is open to output freeze negotiations
On the other hand, Alexander Novak, Russia’s energy minister, refuted the speculations but said that it’s open to such negotiations. On Monday, Mohammed Saleh Al Sada, Qatar’s energy minister, said that the crude oil market is on its way to rebalancing. Despite these positive signals, crude oil prices are still under pressure due to oversupply and speculations about renewed domestic production amid the high oil rig count.
Oil rig count rose for sixth consecutive week
According to the data released by the Baker Hughes on Friday, August 5, the oil rig count moved up by seven rigs to 381. This is the sixth consecutive rise in the oil rig count. It intensified concerns about the chances of an increase in domestic crude oil production amid the supply glut. On August 5, major crude oil producers Carrizo Oil & Gas (CRZO), Canadian Natural Resources (CNQ), Total S.A. (TOT), and British Petroleum (BP) gained 3.7%, 1.8%, 1.4%, and 0.45%, respectively. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) and the PowerShares DB Oil ETF (DBO) gained 1.5% and 0.37%.