Oil prices have been buoyed by talk from Saudi Arabia and other members of the OPEC+ that they could cut output in order to balance the market.
Oil prices were mixed on Monday as investors balanced expectations the OPEC will cut output to support prices against concerns sparked by Federal Reserve Chairman Jerome Powell saying the United States will face slow growth “for some time”.
US West Texas Intermediate (WTI) crude futures rose 2 cents to $93.08 a barrel at 00:03 GMT, adding to Friday’s gain.
Brent crude futures were down 27 cents, or 0.3 percent, at $100.72 a barrel, trimming gains from the previous session.
In a speech on Friday, Powell said curbing inflation “is likely to require a sustained period of below-trend growth” and would “bring some pain to households and businesses”, which rattled equity markets while boosting the dollar.
The dollar index continued to climb on Monday to 109.16, up 0.3 percent in early trade. A stronger dollar weighs on oil as it makes crude more costly for buyers holding other currencies.
However, oil prices have been buoyed by talk from Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, that they could cut output in order to balance the market.
The United Arab Emirates is aligned with Saudi thinking on output policy, a source with knowledge of the matter told Reuters on Friday, while the Omani oil ministry also said it supports OPEC+ efforts to maintain market stability.
Sources last week said OPEC would consider cutting output to offset any increase from Iran should oil sanctions be lifted if Tehran agrees to revive a nuclear deal.
“Traders’ focus will shift back to the supply-demand factor, with the U.S.-Iran nuclear negotiation in progress,” CMC Markets analyst Tina Teng said.
Also supporting prices are signs of rising demand, partly due to higher natural gas prices in Europe spurring power generators and industrial users to switch to diesel and fuel oil, ANZ Research analysts said in a note.
(Edited by : Sangam Singh)
First Published: Aug 29, 2022, 07:33 AM IST