Oil mixed as OPEC supply cut outlook offsets demand fears

MELBOURNE (Reuters) – Oil prices were mixed on Monday, with investors balancing expectations that OPEC will cut output to support prices amid concerns that Federal Reserve Chairman Jerome Powell said the United States States will face slow growth “for a while”.

U.S. West Texas Intermediate (WTI) crude futures rose 2 cents to $93.08 a barrel at 0003 GMT, adding to Friday’s gain.

Brent crude futures were down 27 cents, or 0.3%, at $100.72 a barrel, paring gains from the previous session.

In a speech on Friday, Powell said bringing inflation under control “will likely require a prolonged period of below-trend growth” and “would cause suffering for households and businesses,” which rattled stock markets all over the world. by stimulating the dollar.

The dollar index continued to climb Monday to 109.16, up 0.3% in early trading. A stronger dollar weighs on oil as it makes crude more expensive for buyers holding other currencies.

However, oil prices were supported by comments from Saudi Arabia and other members of the Organization of the Petroleum Exporting and Allied Countries, collectively known as OPEC+, that they may cut production to balance the market.

The UAE is aligned with Saudi thinking on production policy, a source familiar with the matter told Reuters on Friday, while Oman’s oil ministry also said it supported OPEC+ efforts. to maintain market stability.

Last week, sources said OPEC would consider cutting output to offset any increases from Iran if oil sanctions were lifted if Tehran agreed to reinvigorate a nuclear deal.

“Traders’ attention will shift back to the supply-demand factor, with the ongoing US-Iranian nuclear negotiations,” said CMC Markets analyst Tina Teng.

Support prices are also signs of rising demand, in part due to rising natural gas prices in Europe, prompting power generators and industrial users to switch to diesel and fuel oil, said ANZ Research analysts in a note.