Oil prices rose early on Monday in the global commodity market ahead of U.S energy agency and the Organisation of Petroleum Exporting Countries (OPEC) monthly report today.

Crude prices climbed as U.S recession fears wane amidst escalating geological tensions in the Middle East.

Brent climbed by 0.56% to $80.11 per barrel due to positive demand outlook and relative tight supply expectations in the market.

The American benchmark, West Texas Intermediate (WTI) traded at $77.46 per barrel at the same time, a 0.81% rise from the previous session that closed at $76.84 per barrel.

Crude oil prices had fallen in the global commodity market due to concerns about economic activity in top oil consumers in the US and China.

Investors are worried that the US Federal Reserve could be too late in easing its monetary policy, pushing the US economy into a recession.

However, some encouraging economic data from the US suggests that a recession in the world’s largest oil consumer may not be imminent.

Both ICE Brent and WTI have continued the positive run this morning after making gains last week with geopolitical tensions from the Middle East remains in focus.

A fair amount of uncertainty over Iran’s response to last This month’s assassination of a top Hamas leader in Tehran has been supportive of the risk premium for crude oil, ING commodities strategists Ewa Manthey and Warren Patterson said this in note today.

There are suggestions that some of the major oil refineries in the US are restricting operations at their facilities this quarter following shrinking profit margins, ING said.

It is reported that Marathon Petroleum Corp. (owner of the largest US refinery) plans to operate its 13 plants at an average of 90% of capacity utilisation this quarter, the lowest for the period since 2020.

Similarly, PBF Energy Inc. announced that it is preparing to process the least crude in three years. Alongside this, Phillips 66 will run its refineries near a two-year low while Valero Energy Corp. expects to trim oil processing.

According to ING note, these four refiners hold about 40% of US capacity to produce gasoline and diesel.

Drilling activity in the US recovered over the last week. The latest rig data from Baker Hughes shows that the number of active US oil rigs increased by three over the week to 485. highest since mid-June.

However, despite the weekly increase, the oil rig count is still down by 40 compared to this time last year. The total rig count (oil and gas combined) stood at 588 over the reporting week, up from 586 a week earlier.

Recent reports suggest that Saudi Aramco will provide around 43 million barrels of contractual supplies of crude to Chinese customers for September loading, compared with around 45 million barrels for August.

It is believed that some refiners nominated lower volumes because contracted supply is more costly than spot cargo. OPEC will publish its monthly oil market report tonight, while the IEA will also publish its monthly oil market report tomorrow.