On signals of improving demand, oil prices are beginning to rise

26 Aug 2022 , 08:20 AM

Despite gains being restrained as the market anticipated cues from the U.S. Federal Reserve chairman in a speech later in the day, oil prices gained early on Friday on signs of strengthening gasoline demand.

Brent crude futures increased by 46 cents, or 0.5%, to $99.80 a barrel. A barrel of West Texas Intermediate (WTI) crude for the United States increased by 48 cents, or 0.5%, to $93.00. On Thursday, both fell by around $2.

Worries about the destruction of oil demand lessened this week despite uncertainty about the pace of rate hikes in the United States to combat growing inflation, putting both benchmark oil contracts on track for gains of roughly 3% for the week.

Price increases were restrained by caution in the market before Powell’s speech and the potential return of Iranian petroleum to international markets.

Although it is uncertain how quickly Iranian oil shipments will resume even if a deal is achieved, Tehran is examining Washington’s response to a final offer to resurrect a nuclear deal that was drafted by the EU.

Iran would require around a year and a half to produce 4 million barrels per day, up 1.4 million bpd from its present output, if sanctions were lifted.

To counteract any increase from Iran, the Organization of Petroleum Exporting Countries (OPEC) would think about reducing supply.

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