- OPEC+ started talks on production cuts on October 5 – OPEC source
- Russia Hints OPEC+ to Cut Production by 1Mn Bpd – Source
- US markets slide on aggressive Fed measures to contain inflation
- US production returns after being closed due to Hurricane Ian
NEW YORK, Sept 29 (Portal) – Oil prices dipped in choppy trade on Thursday, rising above $90 a barrel and then retreating as traders weighed a deteriorating economic outlook against possible OPEC+ production cuts next week.
Brent crude futures are down 83 cents at $88.49 a barrel after rallying as high as $90.12 during the session. US November crude futures were down 92 cents at $81.23 a barrel.
Top members of the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, have started talks on cutting oil production at their next meeting on Oct. 5, three sources told Portal. Continue reading
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An OPEC source told Portal a cut was “likely,” while two other OPEC+ sources said key members had spoken out on the issue.
Portal reported this week that Russia is likely to propose that OPEC+ cut oil production by about 1 million barrels per day (bpd).
“Right now, the oil market is teetering between Fed-induced demand destruction and tight oil supplies,” said Ryan Dusek, director of Opportune LLP’s Commodity Risk Advisory Group.
US stock markets tumbled on worries that the Federal Reserve’s aggressive fight against inflation could reel the US economy and as investors worried about a collapse in global currency and debt markets.
“Among so much uncertainty, seesaw trading could be common over the next week unless we get more clarity from OPEC+ sources on the likely extent of an adjustment and what that means for previously missed rates,” said Craig Erlam, senior markets analyst at OANDA.
The market also eased as the threat of Hurricane Ian eased and U.S. oil production is expected to return in the coming days after federal data closed about 158,000 bpd in the Gulf of Mexico on Wednesday. Continue reading
In China, the world’s largest crude oil importer, travel during the upcoming week-long National Day holiday will hit its lowest level in years as Beijing’s zero-COVID rules keep people at home while economic woes dampen spending.
Crude oil benchmarks remain on course for weekly gains after a four-week losing streak. Earlier this week, they rebounded from nine-month lows, helped by a fall in the US dollar index and a larger-than-expected drop in US fuel inventories.
The dollar index fell again on Thursday, falling from 20-year highs, suggesting slightly more risk-taking by investors.
Further support for oil prices could come from the United States announcing new sanctions against companies that have facilitated Iranian oil sales. [nL1N3102AF]
“I think traders have almost given up on agreeing a nuclear deal and this US announcement seems like a make-or-break move,” Erlam said.
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Additional reporting by Muyu Xu in Singapore and Ahmad Ghaddar in London; Editing by Marguerita Choy and David Gregorio
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