Oil prices advance on hopes for demand boost in northern hemisphere

Oil prices advanced on Monday on hopes for a demand boost during the summer season in the northern hemisphere.

At 1212 GMT, the benchmark Brent crude futures were higher by 33 cents, or 0.4 per cent, to $82.95 a barrel.

US West Texas Intermediate crude futures added 25 cents, or 0.3 per cent, to $78.70.

Traders also weighed a raft of data from China. The industrial output and fixed asset investment posted slower growth, and oil refining also dropped to the lowest rate this year after more oil refineries were closed for maintenance.

Last week, both benchmarks had gained on upbeat hopes that oil inventories are set to fall as the summer season gets under way in the northern hemisphere amid continued OPEC (Organization of the Petroleum Exporting Countries) supply cuts.

Brent oil prices are down about 9 per cent from a mid-April peak to around $83 a barrel.

Saudi Arabia had said that OPEC’s planned increase in output in the fourth quarter can be halted or reversed if needed.

Russia and Iraq, which have been producing crude oil more than their OPEC quotas, had also pledged last week to meet their obligations.

Worries about the ongoing war in the Middle East also lingered after the Israeli military said that intensified cross-border fire from Lebanon's Hezbollah into Israel could trigger serious escalation.

Global gasoline demand

The gasoline demand globally during the peak summer driving season has declined. This could lower global crude oil demand.

In the US, the demand for gasoline was at 9 million barrels per day (bpd) in the first week of June, 1.7 per cent down as compared to last year’s data.

The demand is also seasonally the lowest since 2021.

In Asia also, weakness in the gasoline market persisted.

Asian refiners’ profit on making gasoline from a barrel of Brent halved in the last week of May to about $4 per barrel.