LONDON: Oil prices were little changed on Tuesday, after falling to a three-week low in the previous session, amid a stronger U.S. dollar, a darkening global macroeconomic outlook and mixed supply signals.
Brent futures were up 6 cents to $90.77 a barrel at 1359 GMT, while U.S. West Texas Intermediate crude (WTI), rose 34 cents to $89.16 per barrel. Earlier in the session, prices fell by more than 1%.
“(Brent) crude oil prices slid to (around) $90 a barrel as rising US yields and a stronger US dollar dominated market sentiment,” said ANZ analysts.
“While supply remains tight, higher interest rates means expensive storage of inventories. This could lead to further destocking of oil inventories while increasing spot availability.”
The U.S. dollar on Monday rose to a 10-month high against a basket of major peers after the U.S. government avoided a partial shutdown and economic data fuelled expectations the Federal Reserve will keep rates higher for longer, or even hike them again.
Higher interest rates and a stronger dollar make oil more expensive for holders of other currencies, which could dampen oil demand.
Talks to restart Iraqi oil exports via a crude oil pipeline that runs through Turkey are still ongoing, an Iraqi oil official told Reuters on Tuesday, one day after Turkey said operations would start again this week after a near six-month stoppage.
“In theory, under the terms of the OPEC+ deal, production (outside the Gulf Cooperation Council) should remain flat over Q4. However, Iraq’s compliance has been somewhat spotty in the past and export levels should be expected to rise, assuming the pipeline resumes operations as planned,” BMI Research analysts said.
Iraq - OPEC’s second-biggest producer - on Tuesday also said it would award 30 new oil and gas projects in its fifth + and sixth licensing rounds.
OPEC+, the Organization of the Petroleum Exporting Countries and allies, is expected to keep its output policy unchanged when it meets on Wednesday, keeping supplies tight.
There could be an element of profit-taking ahead of the OPEC+ meeting after the strong rally since mid-August, or maybe economic fears are weighing, said OANDA analyst Craig Erlam.
“The question now is whether … the recent shift in risk appetite will influence the outcome of the meeting.”
Saudi Arabia is expected to raise its November official selling price of Arab Light crude to Asia for the fifth straight month, according to a Reuters survey.
Comments
Comments are closed for this article.