June 1, 2023

Brighton Journal

Complete News World

Oil compensates for losses after the Saudi Oil Ministry said that OPEC + has options including cuts

Oil compensates for losses after the Saudi Oil Ministry said that OPEC + has options including cuts

Oil pumping cranes at the Vaca Muerta oil and shale gas field in the Patagonian province of Neuquén, Argentina, Jan. 21, 2019. REUTERS/Agustin Markarian

Register now to get free unlimited access to Reuters.com

  • The Saudi Ministry of Oil has OPEC + options to meet the challenges, including cuts
  • US Federal Reserve raises interest rates by 50 basis points in September poll
  • China lowers lending standards to revive faltering economy
  • Western leaders discuss Iran nuclear deal
  • Sources say that OPEC + did not meet production targets by 2.9 million barrels per day in July

HOUSTON (Reuters) – Oil prices rebounded from session lows to trade almost unchanged in a volatile session on Monday after Saudi Arabia’s energy minister said OPEC+ may cut production to meet market challenges.

Brent crude futures for October settlement were down 44 cents, or 0.5%, at $96.28 a barrel by 12:38 p.m. ET (1638 GMT). It had fallen as much as 4.5% earlier in the day, breaking a three-day streak of gains.

US West Texas Intermediate crude for September delivery – due to expire on Monday – was down 27 cents, or 0.3%, at $90.50. The most active October contract was down 24 cents, or 0.3%, at $90.20.

Register now to get free unlimited access to Reuters.com

The official Saudi Press Agency reported, that Saudi Energy Minister Prince Abdulaziz bin Salman said that OPEC + has the commitment, flexibility and means to deal with challenges and provide guidance, including reducing production at any time and in various forms. Read more

See also  Opinion: Adobe's stock has been attacked for spending $20 billion on Figma. But she now owns a rare company.

Earlier in the session, fears that sharp increases in US interest rates could lead to a global economic slowdown, and falling fuel demand drove prices lower.

“Near-term fundamentals look more to the bears until we see some positive economic indicators either from the US or China, which seems unlikely,” said Dennis Kessler, senior vice president of trading at BOK Financial.

The US Federal Reserve will raise interest rates by 50 basis points in September amid expectations that inflation has peaked and growing fears of a recession, according to economists in a Reuters poll. Read more

Investors will be paying close attention to comments made by Federal Reserve Chairman Jerome Powell when he addresses the annual Global Central Banking Conference in Jackson Hole, Wyoming, on Friday.

Read more

Also weighing on prices were concerns about slowing fuel demand in China, the world’s largest oil importer, due in part to the energy crisis in the southwest. Read more

Beijing lowered its benchmark lending rate on Monday as part of measures to revive an economy that has been hobbled by the real estate crisis and a resurgence of COVID-19 cases. Read more

The dollar index rose to a five-week high on Monday. A strong dollar is generally bearish because it makes it more expensive for buyers in other currencies in the dollar-denominated oil market.

Meanwhile, the White House said Sunday that the leaders of the United States, Britain, France and Germany discussed efforts to revive the 2015 Iran nuclear deal, which could allow sanctioned Iranian oil to return to global markets. Read more

See also  Is Coinbase the Next Cryptocurrency Exchange? Here's What Happens ⋆ ZyCrypto

Ole Hansen, head of commodity strategy at Saxo Bank, said higher natural gas prices, exacerbated by lower supply from Russia, were boosting oil demand.

“While funds continued to sell crude oil in anticipation of an economic slowdown, the refined products market was sending another signal with refinery margins rising again, in part due to higher gas prices making refined alternatives, such as diesel, look cheap,” Hansen said.

Supply around the world remains relatively limited, with a pipeline operator that supplies about 1% of the world’s oil through Russia saying it will cut production again due to damaged equipment. Read more

Two OPEC sources said that OPEC+ produced 2.892 million barrels per day less than its targets in July, as sanctions imposed on some members such as Russia and reduced investment by others hampered its ability to increase production. Read more

Register now to get free unlimited access to Reuters.com

(Additional reporting by Noah Browning in London.) Editing by Margarita Choi and Kirsten Donovan

Our criteria: Thomson Reuters Trust Principles.