NEW DELHI: Oil prices rose 1% on Monday, as expectations that OPEC would cut output if needed to support prices, coupled with conflict in Libya and rising demand amid soaring natural gas prices in Europe, helped offset a dire outlook for U.S. growth.
U.S. West Texas Intermediate (WTI) crude futures were up 45 cents, or 0.48%, to $93.51 a barrel by 0632 GMT, adding to a gain of 2.5% last week.
Brent crude futures rose 16 cents, or 0.16%, to $101.15 a barrel, extending last week's gain of 4.4%.
"Oil prices are inching higher on hopes of a production cut from OPEC and its allies to restore market balance in response to the revival of Iran's nuclear deal," said Sugandha Sachdeva, vice president of commodity research at Religare Broking.
Strong U.S. oil exports and a bigger-than-expected draw of oil inventory in the last couple of weeks have also eased some demand concerns amid slowdown fears, Sachdeva added.
Both benchmark contracts had traded lower earlier in the day as the dollar climbed after Friday's blunt comments from Federal Reserve Chairman Jerome Powell that the United States faced a prolonged period of slow growth amid further rate hikes.
"While a strong dollar restrains broad commodity prices, the undersupply issue in the oil markets will probably continue to support the upside bias," CMC Markets analyst Tina Teng said.
Oil prices have been buoyed by hints 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 told Reuters on Friday, while the Omani oil ministry also said it supported OPEC+ efforts to maintain market stability.
Sources said last week OPEC would consider cutting output to offset any increase from Iran, should oil sanctions be lifted if Tehran agrees to revive a nuclear deal.
Heavy clashes in Libya's capital that killed 32 on the weekend sparked concern that the country could slide into a full-blown conflict, leading to a disruption in supply of crude from the OPEC nation.
"Besides, soaring gas prices are likely to result in gas-to-oil switching, which remains a positive trigger for prices," Sachdeva said.
- Reuters
Created by Tan KW | Aug 25, 2024
Created by Tan KW | Aug 25, 2024
Biden is a dumbass! US has more than enough oil and gas domestically! During Trump administration, oil price even dropped to negative because there was too much supply pumping out from US soil! It's all depend on who's the president of the day!
2022-08-29 15:41
Putin would not even dare to attack Ukraine if Trump is in charge! Why because Russia dependance of oil and gas is over 90%! If Trump comes back as president, i think Putin will be history!
2022-08-29 15:42
Beside, nowadays EV sales already broke the inflection point! Meaning, oil demand already peak! It's only going downhill from now on!
The only reason why oil still high and mighty is because EU, another alliance full of dumbass hedge their power need to Russia!
2022-08-29 15:44
Tobby
OPEC cutting production because the demand is not as high as expected!
2022-08-29 15:20