Oil steady as market weighs tight supply against recession fears

Author of the article: Reuters Sonali Paul and Jeslyn Lerh SINGAPORE — Oil prices were steady to higher in Asia trade on Friday, lifted by supply concerns as attention turns to the next meeting between OPEC and its allies, though fears of recession capped gains. U.S. West Texas Intermediate (WTI) crude futures for September delivery…
Oil steady as market weighs tight supply against recession fears

Author of the article:

Reuters

Sonali Paul and Jeslyn Lerh

SINGAPORE — Oil prices were steady to higher in Asia trade on Friday, lifted by supply concerns as attention turns to the next meeting between OPEC and its allies, though fears of recession capped gains.

U.S. West Texas Intermediate (WTI) crude futures for September delivery rose 38 cents, or 0.4%, to $96.80 a barrel by 0330 GMT, reversing losses from the previous session and on track for a nearly 3% rise for the week.

Brent crude futures for September settlement, due to expire on Friday, were flat at $107.14 a barrel. The more active October contract climbed 8 cents, or 0.1%, to $101.91.

“It certainly feels like we are back in trade-off mode again, where sentiment is shifting between recessionary risks in H2 and a fundamentally undersupplied market,” said Stephen Innes, managing partner at SPI Asset Management.

A key driver will be the next meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together called OPEC+, on Aug. 3.

Producers have now unwound the record 9.7 million barrels per day (bpd) supply cut they agreed in April 2020, when the COVID-19 pandemic slammed demand.

“Oil prices have little chance of (posting) deep losses on the back of a weak U.S. dollar and the ongoing supply crunch,” said CMC Markets analyst Tina Teng.

OPEC+ sources said the group will consider keeping oil output unchanged for September, but two OPEC+ sources also told Reuters a modest increase would be discussed.

A decision not to raise output would disappoint the United States after U.S. President Joe Biden visited Saudi Arabia this month hoping to strike a deal on oil production.

A senior U.S. administration official said on Thursday the government was optimistic about the OPEC+ meeting, and said extra supply would help stabilize the market.

Analysts, however, said it would be difficult for OPEC+ to boost supply much given that many producers are struggling to meet their production quotas due to a lack of investment in oil fields.

“OPEC production is constrained, though supplies are stabilizing in Libya and Ecuador. Under-investment in many member countries will keep production constrained,” ANZ Research analysts said. (Reporting by Sonali Paul in Melbourne and Jeslyn Lerh in Singapore; Editing by Kenneth Maxwell and Kim Coghill)

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Read More

Total
0
Shares
Leave a Reply

Your email address will not be published.

Related Posts
Leaders quick to congratulate France’s Macron in relief for Europe
Read More

Leaders quick to congratulate France’s Macron in relief for Europe

Author of the article: BRUSSELS — European Union leaders were quick to congratulate French President Emmanuel Macron for his election victory over his far-right rival on Sunday, reflecting relief at avoiding a political shock in one of the bloc’s most pivotal countries. European Council President Charles Michel, as well as the prime ministers of Belgium…
EU countries at odds over green investment label for nuclear energy
Read More

EU countries at odds over green investment label for nuclear energy

Author of the article: Reuters Kate Abnett and Philip Blenkinsop BRUSSELS — European Union countries disagreed ahead of a summit on Thursday over whether the bloc should label nuclear energy as a climate-friendly investment, as leaders await a decision on the matter from Brussels. The European Commission is considering whether to include nuclear and natural…
Euro finds footing, dollar wobbles toward Fed minutes
Read More

Euro finds footing, dollar wobbles toward Fed minutes

SINGAPORE — The euro steadied on Wednesday and riskier currencies bounced, lifted by optimism Financial Post Top Stories Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc. By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You…
Brits Are Working From Home More Than Rest of Europe
Read More

Brits Are Working From Home More Than Rest of Europe

People in Canada work remotely 1.7 days a week Author of the article: Bloomberg News Irina Anghel Published Jul 19, 2023  •  Last updated 15 hours ago  •  1 minute read Working from home tends to be more common in English-speaking countries. Photo by Getty Images/iStockphoto United Kingdom employees are working from home more than workers…