Investing.com - Oil was up on Monday morning in Asia after Iraq said it would step up production cuts and U.S. President Donald Trump took executive action on economic aid for Americans hit by the COVID-19 pandemic, reigniting hopes for a recovery in fuel demand.
WTI futures rose 1.07% to $41.66 by 10:32 PM ET (10:32 AM GMT) and Brent Oil futures also were up 0.83% to $44.78.
Iraq, a key member of the Organization of the Petroleum Exporting Countries and its allies (OPEC+), announced on Friday that it will be stepping up production cuts to compensate for failing to comply with a deal made in April to limit oil production.
The country will cut production by 400,000 barrels per day in August and September. Energy ministers from Saudi Arabia and Iraq also said in a joint statement that they would work together to improve the stability of global oil markets.
On Sunday, Saudi Aramco (SE:2222), the largest oil distributor in the world, reported a 73% drop in second quarter profits but still plans to distribute $75 billion in dividends this year. CEO Amin Nasser said the company has seen signs of a recovery in global oil demand.
“Look at China, their gasoline and diesel demand is almost at pre-COVID-19 levels,” Nasser told the media in announcing the results. He said Asia and other markets are “picking up”.
“There’s a small undercurrent of positivity this morning emanating from comments by Saudi Aramco who are seeing a recovery in demand. Saudi Arabia and Iraq forging better relationships over the oil deal are excellent for the compliance outlook,” AxiCorp market strategist Stephen Innes told Reuters.
Over the weekend, Trump signed executive orders to provide up to $400 per week in supplemental unemployment benefits to millions of jobless Americans, although the number is less than the $600 from the previous bill which expired July 31.
The measures also included a suspension of the collection of payroll taxes for social security and other federal programs until the end of this year. It is unclear how easy to implement those orders will be.