ALBAWABA – Oil prices slipped Monday after Brent crossed the $90-barrier on Friday, driven by Saudi and Russian supply cuts, even as the United States (US) Dollar broke its weeks-long winning streak against a stronger Yuan and Yen in Asia, news agencies reported.
Better late than never: India responds to Belt and Road with Mideast-India railway-corridorBrent crude fell $0.15 to $90.50 a barrel by 0644 GMT, according to Reuters, while US West Texas Intermediate crude traded at $87.08 a barrel, down $0.43.
Oil prices have gained in the past two consecutive weeks with Brent settling at its highest since November on Friday.
Both Saudi Arabia and Russia announced last week they will extend their voluntary supply cuts of a combined 1.3 million barrels per day until the end of the year to bolster oil prices.
Elsewhere, China’s deflationary pressures eased slightly in August as consumer prices rose, a positive sign for the world’s biggest oil importer. Financial markets are also pricing in lowered odds of a recession in the US, as the dollar weakened, according to Bloomberg.
Brent oil prices hit a 10-month high on Friday - Shutterstock
"Oil prices have largely converged with our fair value estimate, but with Saudi Arabia more aggressive than expected with its unilateral cut and continuing strength in demand, we caution against fading the recent run-up," Barclays analyst Amarpreet Singh said in a note, as reported by Reuters.
Later this week, all eyes will turn to the International Energy Agency and the Organization of the Petroleum Exporting Countries’ (OPEC) reports. In the meantime, any sign of strong demand will likely push oil prices higher.
Producers added an oil rig last week in the US for the first time since June, Baker Hughes said in its weekly report. But the total count was still down 127, or 17 percent, compared to the same period last year, according to Reuters.
WTI is likely in the process of marking out a new higher range at above $83 and below resistance at $93.50 in the weeks ahead, the Canada-based news agency reported. Especially with concerns around demand in China and Europe capping further upside, IG analyst Tony Sycamore said in a note.
