Oil prices fluctuate as fears about demand counter potential OPEC supply cuts

29 Aug 2022 , 07:17 AM

Oil prices fluctuated on Monday as traders weighed expectations that OPEC will reduce production to maintain prices against worries raised by remarks made by Jerome Powell, chairman of the Federal Reserve, that the United States may experience weak growth “for some time.”

In addition to Friday’s rise, U.S. West Texas Intermediate (WTI) crude futures increased 2 cents to $93.08 per barrel.

At $100.72 per barrel, Brent crude futures were down 27 cents, or 0.3%, from the previous session’s high.

Powell stated in a speech on Friday that reducing inflation “is likely to require a sustained period of below-trend growth” and that doing so would “bring some pain to individuals and companies,” which shook equity markets and strengthened the currency.

The dollar index increased on Monday, rising to $109.16, up 0.3% in the first minutes of trading. Oil prices are impacted by a higher dollar because purchasers who use foreign currencies must pay more for petroleum.

The Organization of the Petroleum Exporting Countries and its partners, collectively known as OPEC+, have suggested that they would reduce supply in order to balance the market, which has boosted oil prices.

According to a Reuters report on Friday, the United Arab Emirates and Saudi Arabia have similar views on output policy. The Omani oil ministry has stated its support for OPEC+’s efforts to keep the market stable.

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