Oil appears to be on track for weekly gains amid tightening supply expectations, especially with investor interest shifting to a major speech on the US economy later on Friday by Federal Reserve Chairman Jerome Powell, along with Iranian supply concerns and Saudi statements that ignited the oil market.
Oil rose earlier this week following Saudi Arabia indicated potential OPEC + production cuts to stabilize the volatile market, a move supported by other members of the organization including Iraq, Kuwait, Sudan, the United Arab Emirates and a number of members of the organization, especially with the approach of the agreement. The Iranian nuclear program, which will allow the return of Iranian flows to the market once more.
Prices now
The US light NYMEX crude rose to levels near 94 dollars per barrel, at a rate of regarding 1.5% per barrel.
The benchmark Brent crude increased during these moments of trading today, Friday, to levels near $100 a barrel, an increase of regarding 1.3 percent.
The two crudes jumped in early trade by as much as a dollar a barrel, following falling by regarding two dollars on Thursday.
Texas Intermediate crude futures crossed $93 a barrel following closing 2.5% lower in the previous session as traders digested hawkish news headlines from Federal Reserve officials. Powell is expected to reiterate the central bank’s determination to continue raising interest rates to curb rampant inflation.
Oil has lost nearly a quarter of its value since June due to mounting concerns regarding a global economic slowdown, but it appears to have found ground around $90 a barrel this month. The prospect of reviving the nuclear deal with Iran, which might lead to increased exports, has added to the bearish sentiment recently.
Powell is scheduled to speak at 10 a.m. Washington time, marking the highlight of the two-day Jackson Hole symposium. Kansas City Fed President Esther George – who voted on monetary policy this year – said the Fed has not yet raised interest rates to levels that affect the economy and may have to exceed 4% for some time.
Urgent: A strong rise in the American market, oil ends with a loss of 2%, and gold at $ 1770
OPEC pressure
Sources told Archyde.com that potential production cuts in the OPEC+ cartel discussed by Saudi Arabia this week will likely coincide with Iran’s return to oil markets if Tehran reaches a nuclear deal with the West.
“The rise of oil has been exaggerated, as many investors knew that it would take several months for Iranian oil to flow into the international market,” said Kazuhiko Saito, chief analyst at Fujituni Securities.
“Even if an agreement is reached to revive the 2015 Tehran nuclear deal, which means that OPEC+ will not cut production so quickly,” added the chief analyst at Fujituni Securities.
endorsement and support
Sudanese Energy and Oil Minister Mohamed Abdullah supported the statements of his Saudi counterpart made this week regarding the readiness of the Organization of the Petroleum Exporting Countries (OPEC) to intervene in order to restore balance in the oil market.
An informed source also told Archyde.com today, Friday, that the UAE agrees with Saudi Arabia’s thinking on oil markets and supports its recent statements.
The kingdom, the largest producer in OPEC, indicated on Monday the possibility of implementing production cuts to balance the oil market, which it described as suffering from “schizophrenia”.
The Sudanese minister said in a statement that his country supports the efforts of OPEC + to maintain market stability in the face of distortions and fluctuations.
He also stressed the importance of the statements “made by the Saudi Energy Minister regarding market instability and price fluctuations.”
The statement added that Sudan, a member of OPEC +, also expressed its full support for the mechanism established by the OPEC + alliance, “which provided the necessary tools to stimulate the adjustment of oil production and face all market challenges.”
Iraq, Algeria, Libya, Kazakhstan, Azerbaijan, Venezuela, Congo and Equatorial Guinea made similar statements ahead of the OPEC+ meeting, which will be held on Sept. 5, which includes members of the Organization of the Petroleum Exporting Countries and other producers including Russia.
Urgent: Oil rises to $ 150 if Saudi Arabia implements its threat and cuts production
150 dollars
It seems that Saudi Arabia’s statements regarding production cuts in the event of a nuclear agreement with Iran allowing the lifting of the ban on more oil flows to the markets, turned the scales upside down.
Paul Sankey, chief analyst at Sankey Research, says that OPEC’s implementation of the kingdom’s statements might push oil prices to $150 a barrel soon.
The cuts will exacerbate the energy supply shortage, which threatens many Western countries as winter approaches, added a senior analyst at Sankey Research.
The oil shortage coincides with Europe’s return to more polluting energy modes such as coal, with major disruptions to Russian gas supplies and fears of an even more severe crisis in the coming winter.
