Crude oil prices today: Brent rises to $85.3/barrel, WTI up 0.4%; what's pushing the rates?

Crude oil prices edged higher in early trade on Monday, July 1, despite the manufacturing index in China – the world's top crude importer – sliding for a second consecutive month.

Brent futures for September delivery were trading at $85.29 per barrel at 0140 hours GMT, which was up by $0.46 or 0.54% as against the last closing price.

The U.S. West Texas Intermediate (WTI) crude futures were trading 0.4% or 31 cents higher at $81.85 a barrel.

The upward movement in crude prices came a day after China's purchasing managers’ index (PMI) showed a slide in manufacturing activity in May. The index dropped by 20 basis points month-on-month (MoM) to 50.6%, marking the second consecutively monthly decline.

The new order index, a key metric to assess the pace of the manufacturing sector, dropped 0.1% MoM to 49.5%.

What pushed the crude prices upwards?

Despite the slump in Chinese manufacturing, the commodities market was upbeat due to the prospects of higher demand during the summer months, combined with a strain on supply.

Data released by the US Energy Information Administration on Friday showed both demand and production rising in recent period. American field production went up 72,000 barrels per day (bpd) MoM to 13.25 million bpd in April, which was the highest since December, it showed.

The demand in the US, during April, rose by 131,000 bpd MoM to 20 million bpd, which is the highest in 2024 so far, the EIA added.

The expectations from the US Federal Reserve to slash interest rates in the coming months has also supported the prices, IG analyst Tony Sycamore said in a note.

The rates are in the positive trajectory also due to the supply side risks, as Russia's advancements in Ukraine, and the flare-up of tensions between Israel and the Iran-backed Lebanese militant group Hezbollah may adversely hit the global supply, experts pointed out.

Notably, both Brent and WTI have risen by around 6% in June, with the former settling above $85 per barrel for the past two weeks.