RIYADH: Oil prices were set to post their biggest monthly gains in more than a year on Monday, on expectations that Saudi Arabia will extend voluntary output cuts into September. Brent crude futures rose 74 cents higher to $85.73 a barrel at 04:14 p.m. Saudi time, while US West Texas Intermediate crude climbed 98 cents to $81.56 a barrel, rising more than $1 earlier in the session. Brent and WTI settled on Friday at their highest levels since April, gaining for a fifth straight week, as tightening oil supplies globally and expectations of an end to US interest rate hikes supported prices. Both are on track to close July with their biggest monthly gains since January 2022. Goldman Sachs upgrades oil demand outlook Goldman Sachs on Sunday revised up its global oil demand forecast for the year while sticking to its 12-month Brent price projection of $93 per barrel as higher realized inventories offset the demand boost from a less pessimistic growth outlook. Goldman analysts estimate global oil demand climbed to an all-time high of 102.8 million barrels per day in July and see solid demand driving a larger-than-expected 1.8 million bpd deficit in the second half this year and a 0.6 million bpd deficit in 2024. A reduced recession risk and a strong effort by the Organization of the Petroleum Exporting Countries to push up prices support Goldman’s view on higher oil prices and an outlook for less volatility, the analysts wrote in a note. Oil prices hovered near three-month highs on Monday, set to post their biggest monthly gains in over a year on expectations that Saudi Arabia would extend voluntary output cuts into September and tighten global supply. Saudi supply cuts have brought back deficits, the Goldman analysts said, adding that they see the extra 1 million bpd Saudi cut to last through September and be halved from October. The Wall Street bank upgraded its oil demand estimate by around 550,000 bpd and sees 2023 supply higher by around 175,000 bpd. The bank maintained its $86 a-barrel Brent forecast for December 2023, and it expects prices to rise to $93 per barrel in the second quarter of next year as supply deficits continue. “However, the significant rise in OPEC spare capacity over the past year, the return to growth in international offshore projects, and declining US oil production costs limit the upside to prices,” it said. UK to grant over 100 new North Sea oil and gas licenses The UK will grant more than 100 new oil and gas licenses in the North Sea as part of efforts to tap domestic supplies and become more energy independent, the government said on Monday. Prime Minister Rishi Sunak said the move was compliant with the government’s environmental targets, with around a quarter of the UK’s energy demand due to still be met by oil and gas when the UK reaches net zero in 2050. Sunak said the new licenses would support domestic supply, reduce reliance on hostile states, boost jobs in the sector and decrease the carbon footprint when compared with an alternative option of importing liquefied natural gas. The government also announced plans to set up two new carbon capture usage and storage clusters in Scotland and northern England. “As the UK is a rapidly declining producer of oil and gas, new oil and gas licenses reduce the fall in UK supply in order to ensure vital energy security, rather than increase it above current levels — so that the UK remains on track to meet net zero by 2050,” the government said. (With input from Reuters)