OIL PRICES INCREASE ON SIGNALS OPEC MIGHT CUT OUTPUT

OIL PRICES INCREASE ON SIGNALS OPEC MIGHT CUT OUTPUT

OIL PRICES INCREASE ON SIGNALS OPEC MIGHT CUT OUTPUT

Oil prices closed with gains on Friday, driven by a signal from Saudi Arabia that OPEC could cut output, but trading was unstable when investors digested and eventually ignore warnings from the Head of the US Federal Reserve regarding economic pain ahead.

Brent crude futures contracts increased by $ 1.65 to set up a barrel at $ 100.99. U.S. West Texas Intermediate (WTI) futures contracts increased by 54 cents to settle at $ 93.06 per barrel. The two contracts increased and dropped by $ 1 throughout the session.

Overall, Brent increased by 4.4% for the week, while WTI increased by 2.5%.

The United Arab Emirates has become the latest member of OPEC + to declare that it is aligned with the thought of Saudi Arabia on the crude markets.

On Monday, Saudi Arabia marked the possibility of cutting production to compensate for the return of Iran’s barrels to the oil market if Tehran reached a nuclear agreement with the West.

“The impression is fixed that Saudi Arabia does not want to tolerate price declines below $ 90. On the other hand, speculators can see this as an invitation to bet further price increases without fear of clearer price reduction,” said Commerzbank in a note.

Tighten Monetary Policy

The oil prices have briefly dropped after the president of the Fed, Jerome Powell, said that tight monetary policy could be in store “for a while” to combat US inflation, which means slower growth, a weaker job market, and “some pain” for households and businesses.

Data has shown a small decrease in US inflation, with Fed’s personal consumption price index down in July to 6.3% annually, from 6.8% in June. Inflation expectations based on the steps of the University of Michigan were also relieved in July.

But an improvement of a single month is far from what the Fed needs to see, said Powell.

“The market fears that Powell seems to be a little more aggressive with regard to inflation,” said Phil Flynn, analyst of the Price Futures Group Price in Chicago.

Meanwhile, some policy formulators of the European Central Bank want to discuss an increase in the interest rate of 75 basis points at a policy meeting on September 8, even if a recession is risked, since the inflation perspective is deteriorating.

In the U.S. supply, the number of oil drilling rigs, indications of future production, up 4 to 605 a week to August 26, said Baker Hughes Co. on Friday.

Future Contracts

The money manager raised the long-term position and the long US crude oil option this week to 23 August with 24,215 contracts to 179,039, the US Commodity Futures Commission (CFTC) said on Friday.

OIL PRICES INCREASE ON SIGNALS OPEC MIGHT CUT OUTPUT