Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Oil settles lower after hitting $90/bbl as OPEC+ considers output cut

Commodities Sep 29, 2022 20:25
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Pump jacks operate at sunset in Midland, Texas, U.S., February 11, 2019. Picture taken February 11, 2019. REUTERS/Nick Oxford/File Photo

By Shariq Khan

NEW YORK (Reuters) -Oil prices settled lower on Thursday in choppy trading, rising above $90 per barrel and then retreating as traders weighed a worsening economic outlook against potential OPEC+ output cuts next week.

Brent crude futures settled down 83 cents at $88.49 per barrel, after rising as high as $90.12 during the session. U.S. crude futures for November settled 92 cents lower at $81.23 a barrel.

Leading members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have begun discussions about an oil output cut at their next meeting on Oct. 5, three sources told Reuters.

One OPEC source told Reuters a cut was "likely", while two other OPEC+ sources said key members had spoken about the topic.

Reuters reported this week that Russia is likely to propose that OPEC+ reduce oil output by about 1 million barrels per day(bpd).

"Right now, the oil market is teetering between the Fed-induced demand destruction and tight oil supplies," said Ryan Dusek, a director in the Commodity Risk Advisory Group at Opportune LLP.

U.S. stock markets tumbled on worries that the Federal Reserve's aggressive fight against inflation could hobble the U.S. economy, and as investors fretted about a rout in global currency and debt markets. [.N]

"Amid so much uncertainty, seesaw trade may be common over the next week, unless we get more clarity from OPEC+ sources on the likely size of any adjustment and what it means for previous missed quotas," said Craig Erlam, senior markets analyst at OANDA.

The market also eased as the threat of Hurricane Ian receded with U.S. oil production expected to return in coming days after about 158,000 bpd was shut in the Gulf of Mexico as of Wednesday, according to federal data.

In China, the world's biggest crude oil importer, travel during the forthcoming week-long national holiday is set to hit its lowest level in years as Beijing's zero-COVID rules keep people at home while economic woes curb spending.

Crude benchmarks remain on pace to notch weekly gains after a four-week losing streak. Early this week they rebounded from nine-month lows, buoyed by a dip in the U.S. dollar index and a larger than expected U.S. fuel inventory drawdown. [USD/][EIA/S]

The dollar index dropped again on Thursday, easing off 20-year highs, indicating some more risk appetite from investors.

Further support for oil prices could come from the United States announcing new sanctions against companies that facilitated Iranian oil sales. [nL1N3102AF]

"I think traders have almost given up on a nuclear deal being agreed and this announcement from the U.S. appears to be a make or break move," said Erlam.

Oil settles lower after hitting $90/bbl as OPEC+ considers output cut
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Anon Anon
Anon Anon Sep 29, 2022 5:53
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Rant: I blame the US for starting all these mess. It all started with loose monetary policy for prolonged period (QE, lower interest rate etc) which caused inflation that is now exported to the rest of the world (dollar is global reserve currency). Geopolitical conflicts (Ukraine), lack of confidence in major currencies (e.g. due to underlying economic issues) strengthen dollar. The hegemony of dollar should be stop as its not doing anyone else any favour to restore the financial stability for rest of the world.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email