Singapore — 0200 GMT: Crude oil futures were trading steady to higher in mid-morning trade in Asia June 22, with investors weighing mixed drivers at the start of a new week.
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At 10:00 am Singapore time (0200 GMT), ICE Brent August crude futures were up 18 cents/b (0.43%) from the June 19 settle at $42.37/b, while the NYMEX July light sweet crude contract was 12 cents/b (0.30%) higher at $39.87/b.
"Sentiment was buoyed by OPEC's pledge to adhere better to agreed production cuts," ANZ analysts said in a June 22 note.
Crude prices have been buoyed by stepped-up pressure on OPEC+ members to adhere to production quotas following a June 18 meeting. OPEC+ crude production could fall by about 1 million b/d in July and August from May levels, based on plans submitted by Iraq and Kazakhstan to institute deeper output cuts to make up for violating their quotas and loading schedules issued by fellow compliance laggards Nigeria and Angola.
"However, there are still worrying signs ahead for the market with a second wave of COVID-19 cases in China and the US presenting a challenge for industry," the ANZ analysts said.
Fears of a COVID-19 resurgence have limited gains in prices as the demand recovery outlook remains clouded.
"Traffic in Beijing has plunged as authorities battle a fresh outbreak. In the US, Apple has been forced to shut previously opened shops as cases rises in various states," the ANZ analysts noted.
China reported 26 new confirmed coronavirus cases for June 20 and the emergence of a new cluster in Beijing has raised concerns of a second wave of infections.
A decline in US oil rigs was also supporting sentiment to some extent amid earlier concerns any recovery in prices could spur an increase in drilling.
The US oil rig count fell by 10 to 189 in the week ending June 19, according to UOB analysts in a June 22 note citing Baker Hughes dat, noting it was the lowest since June 2009.