Oil prices and commodity-related exchange traded funds strengthened Monday on an unexpected dip in Saudi Arabian crude output over July
On Monday, the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, was up 0.8% and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, added 0.7%. Meanwhile, WTI crude oil futures were 1.1% higher to $69.2 per barrel and Brent crude futures were up 0.9% to $73.9 per barrel.
According to the Organization of Petroleum Exporting Country delegates, Saudi crude production declined to 10.3 million barrels per day in July, compared to 10.49 million barrels per day in June, reports Christopher Alessi for the Wall Street Journal.
Analysts at Commerzbank said the report of lower output from the cartel’s biggest oil producer have “lent support” to prices. Furthermore, the markets widely believed that Saudi production rose in July since OPEC and its allies agreed in late June to increase crude output in July after capping output for more than a year.
The Potential Drop in Saudi Output
However, oil traders should take this new development with a grain of salt as analysts at ING Bank warned that the potential drop in Saudi output is “different to a number of other estimates out there, with some estimating that Saudi oil production increased to as much as 10.8 million barrels a day over the month.”
OPEC will release official numbers on August 13.