Oil prices rose modestly in early trade on Monday as the U.S. dollar rose after hitting an eight-month low last week and fears that a sharp rise in global interest rates could trigger a recession. And will affect fuel demand.
The dollar index climbed to a 20-year high on Monday, boosting oil prices.
Brent crude futures were up 17 cents, or 0.2 percent, at $86.32 a barrel by 0116 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 21 cents, or 0.3 percent, at $78.95 a barrel. Both contracts fell about 5 percent on Friday.
Crude oil should get some help, analysts say, as Russia ramps up troops for the war against Ukraine and EU sanctions on Russian oil are set to take effect in December.
“This is a really big question mark for oil in the forecast for the next few quarters – how weak demand projections weigh against EU sanctions,” said Commonwealth Bank analyst Vivek Dhar, Commonwealth Bank. said Vivek Dhar, analyst at the bank, who had expected Brent to return to $100 a barrel in the fourth quarter. .
“It will still be difficult for the market to find that oil to replace Russian supply,” Dhar said.
With prices falling, attention will turn to the Organization of the Petroleum Exporting Countries and the Russia-led coalition, known as OPEC+, after agreeing to modest output cuts at their last meeting on October 5. What can be done at the meeting?
ANZ Research analysts pointed to remarks by Nigeria’s Oil Minister Tampere Silva that “the sell-off could see OPEC intervene again,” adding that OPEC would consider production cuts as current prices for some members. They are hurting the budget.
But given that OPEC+ is producing below its target, any announced cuts are unlikely to have much impact on actual supply.
“I don’t think it will be a game changer,” Dhar said.
Last week’s data showed OPEC+ fell 3.58 million barrels per day short of its production target in August, a big shortfall from the previous month.
