Contents
Oil prices saw a decrease on Wednesday, just ahead of an important panel meeting of OPEC+ ministers. This drop came as the market contemplated the prospects of supply shortages, while also grappling with concerns that high interest rates could lead to a reduction in fuel demand.
Brent Crude and WTI Experience Minor Declines
Brent crude oil futures slipped by 18 cents, equivalent to 0.2%, resting at $90.74 a barrel by 0611 GMT. Meanwhile, U.S. West Texas Intermediate crude (WTI) experienced a 20-cent decline, settling at $89.03 per barrel.
Rising Treasury Yields Impact the Market
Data released on Tuesday night unveiled that U.S. job openings had surged to their highest level in over two years. This revelation led to a significant surge in Treasury yields. These rising yields added to the apprehension in the oil market.
Stronger Dollar Raises Concerns
Oil prices benchmarks have also been feeling the pressure due to concerns surrounding the strengthening U.S. dollar. A stronger dollar can diminish global demand for oil by making it more expensive for holders of other currencies.
Market analyst Yeap Jun Rong of IG commented, “A resilient labor market is deemed to be providing more room for the Federal Reserve (Fed) to keep rates high for longer.”
Read More: Gold and Silver Futures Continue Decline Amid Rising US Yields
OPEC+ Expected to Maintain Output Policy
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, are anticipated to keep their output policy unchanged as they convene on Wednesday. This decision comes after Saudi Arabia and Russia prolonged their output cuts until the end of the year.
Saudi Arabia is also expected to raise its November official selling oil prices of Arab Light crude to Asia, marking the fifth consecutive month of such increases. This move is in line with expectations of continued tight supplies of medium sour crude.
Iraqi Oil Prices Exports in Focus
Discussions regarding the resumption of Iraqi oil exports through a pipeline in Turkey are ongoing. This development follows Turkey’s announcement that operations would recommence this week after a nearly six-month hiatus.
Russia Eases Diesel Export Ban
Russian authorities have signaled their readiness to partially lift the ban on diesel exports in the coming days, as reported by Russian newspaper Kommersant.
U.S. Supply and Demand Under Scrutiny
Investors are closely monitoring supply and demand dynamics in the United States. Industry data indicated a decrease of approximately 4.2 million barrels in crude stocks for the week ending September 29, according to sources citing figures from the American Petroleum Institute (API).
Disclaimer: Please note that this article serves solely for informational purposes. Thus, must not construe as financial advice. We advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
