Oil prices back on the rise on U.S. stimulus hopes, Iraq output cut

MELBOURNE, Aug 10 (Reuters) - Oil prices climbed in early
trade on Monday, clawing back over half of Friday's losses, on
hopes for a stimulus deal to shore up the U.S. economic recovery
and a pledge from Iraq to deepen its crude oil supply cuts.
U.S. West Texas Intermediate (WTI) crude CLc1 futures rose
49 cents, or 1.2%, to $41.71 a barrel at 0010 GMT, while Brent
crude LCOc1 futures were up 40 cents, or 0.9%, at $44.80 a
barrel.
While both benchmark contracts fell on Friday, hurt by
demand concerns, Brent ended the week up 2.5%, with WTI up 2.4%.
Hopes grew on Sunday that a stand-off would end between U.S.
Democrats and the White House on a new support package for
cash-strapped U.S. states hit by the coronavirus pandemic.
U.S. House Speaker Nancy Pelosi and Treasury Secretary
Steven Mnuchin both said they were willing to restart talks on a
deal to cover the rest of 2020. At the same time, Saudi Arabian Aramco's 2222.SE Chief
Executive Amin Nasser said he sees oil demand rebounding in Asia
as economies gradually open up after the easing of coronavirus
lockdowns. "There's a small undercurrent of positivity this morning
emanating from comments by Saudi Aramco who are seeing a
recovery in demand," said AxiCorp market strategist Stephen
Innes.
On the supply side, Iraq said on Friday it would cut its oil
output by a further 400,000 barrels per day in August and
September to compensate for its overproduction in the past three
months. The move would help it comply with its share of cuts by
the Organization of the Petroleum Exporting Countries and their
allies, together called OPEC+. The sharper cut will take Iraq's total reduction to 1.25
million bpd this month and next.
"Saudi Arabia and Iraq forging better relationships over the
oil deal are excellent for the compliance outlook," Innes said.
The Saudi and Iraqi energy ministers said in a joint
statement that OPEC+ efforts would improve the stability of
global oil markets, accelerate its balancing and send positive
signals to the markets.