– This is the script of CNBC's news report for China's CCTV on July 4, Tuesday.
Oil prices' surge overnight helped WTI achieve a run of eight straight days of gains and its longest stretch of daily gains since 2012. The gain on Monday of oil prices was due to data showing diminished U.S. output. Drilling activity for new oil production in the United States fell for the first time since January, dropping by two rigs to 756 rigs. This led to investors doubting US shale producers' determination in increasing its production. Therefore, both market's confidence and oil prices are boosted.
The oil prices' surge also pushed the price of energy stocks higher, resulting in S&P 500 to increase by 2%.
[David Dietze, President & Chief Investment Strategist, Point View Wealth Management] "The signals to producer is quite clear. Stop production! And guess what, the demand of the global economy is going to continue to grow. At some point, you gonna have a big spike-up. I can't predict when but I think energy stock, commodities look to be a good safe haven amidst record high equity prices."
However, as many predict the rebound to be continued for oil prices, some warn that news of rising OPEC production could cap gains.
In May, OPEC reached its daily production of 32.21million bpd, 336,000 bpd higher than the previous month. The increase was largely due to raising oil production from OPEC member Libya, which was exempted from the output cuts. Meanwhile, Iraq and Nigeria also contributed to the raising production.
But what could be worse, a Reuters survey found that OPEC oil output has risen in June by 280,000 bpd to a 2017 high - 32.57million bpd- again, as a further recovery in supply from the two member countries exempt from a production-cutting deal offset strong compliance by their peers.
According to the survey, Libya's output most probably increased to, nearing at 1 million bpd, its highest in 4 years. Reuters also reported that OPEC's adherence with its supply curbs was at 92 percent in June, declined from 95 percent in May, the survey found.
CNBC's Qian Chen, reporting from Singapore.