OPEC+ negotiations bolster oil prices despite stronger US dollar
ALBAWABA – Oil prices steadied on Thursday as OPEC+ members negotiate cutting oil supplies amid weaker demand indicators, with Bloomberg’s US dollar index up on stronger safe-haven markets.
The Organization of Petroleum Exporting Countries and its allies (OPEC+) was supposed to meet on Sunday, but Bloomberg’s experts speculate that delaying the meeting helped Saudi Arabia’s position.
Oil prices were ticking higher over the weekend and traders anticipated an organization-wide output cut, which would have undermined the Saudi proposition to further drop supply.
Oil prices up despite stronger US dollar - Shutterstock
Meanwhile, talks among members of the organization and its allies have been ongoing on Thursday, bolstering oil prices.
Brent crude futures climbed $0.13, to $83.23 a barrel by 0740 GMT, according to Reuters, while West Texas Intermediate (WTI) crude futures rose $0.17, at $78.03 a barrel.
Overall, oil prices rose 0.2% for both benchmarks, before steadying out as OPEC+ negotiations carry on.
The benchmark oil contracts settled nearly 2 percent higher the previous day, Reuters reported, amid hopes for some form of a price-supportive resolution from the OPEC+ group.
US dollar rises, oil prices up amid weaker demand on hopes of more OPEC+ cuts
Meanwhile, the United States (US) Dollar strengthened slightly as investors shifted from treasuries to stocks, safe havens and currencies on bets that the Federal Reserve is done hiking interest rates. Traders have also wagered that the Fed will cut rates as soon as next year on economic and inflation data from the US pointing to a cooling but still growing economy.
Bloomberg’s US dollar index spot was up 0.48 percent on Thursday, by 1351 Amman time, at 103.2540.
Oil prices up despite stronger US dollar - Shutterstock
"The countdown to the upcoming OPEC+ meeting is now underway, and that has been the central focus for oil prices, as market participants have been shrugging off any bearish news in the way for now," Yeap Jun Rong, market strategist at IG, told Reuters.
"We have a larger-than-expected build-up in crude inventories from the EIA data, along with a downside surprise in China's PMI figures this morning. Both may support a narrower supply-demand deficit, but failed to cause much dent in prices," Yeap added.
Oil extended a two-day rally on a report that OPEC and its allies were mulling over additional cuts of as much as a million barrels per day, Agence France-Presse (AFP).
Saudi Arabia and Russia have already imposed massive reductions this year in a bid to support oil prices but the latest decision has proved tough as African producers push back against the move.
