NEW YORK: Oil prices stabilized lower on Thursday (Sept. 29) in choppy trade, rising above US$90 a barrel, then retreating as traders weighed a deteriorating economic outlook amid potential oil production cuts. OPEC+ next week.
Brent crude futures settled 83 cents at US$88.49 a barrel, after hitting US$90.12 during the session. U.S. crude futures for November were 92 cents lower at US$81.23 a barrel.
Top members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have begun talks about cutting oil production at their next meeting on Oct. 5, three sources told Reuters. Reuters.
An OPEC source told Reuters a cut was “likely”, while two other sources said key members had spoken on the subject.
Reuters reported this week that Russia is likely to offer OPEC+ to cut oil production by around 1 million barrels per day (bpd).
“Right now, the oil market is swinging between Fed-induced demand destruction and oil supply,” said Ryan Dusek, director of the Commodity Risk Advisory Group at Opportune LLP.
“Amid so much uncertainty, seesaw trading could be common over the next week unless we get more clarity from OPEC+ sources on the likely magnitude of any adjustment and what this means for previous missed quotas,” said Craig Erlam, senior market analyst at Oanda. .
The market also eased as the threat from Hurricane Ian receded and U.S. oil production was expected to return in the coming days after the Gulf of Mexico closed around 158,000 bpd on Wednesday, data showed. federal.
In China, the world’s biggest crude oil importer, travel during the next week of national holidays is set to hit its lowest level in years as Beijing’s zero Covid rules keep people at home while economic difficulties curb expenses.
Crude benchmarks remain on pace to post weekly gains after a four-week losing streak. Earlier in the week, they rebounded from nine-month lows, supported by a decline in the US dollar index and a bigger-than-expected decline in US fuel inventories.
The dollar index fell again on Thursday, dampening 20-year highs, indicating heightened risk appetite among investors.
Further support for oil prices could come from the US announcement of new sanctions against companies that facilitated sales of Iranian oil.
“I think the traders have almost given up on getting a nuclear deal and this announcement from the US seems like a breakthrough decision,” Erlam said. – Reuters