Business Standard

Brent crude stable as market juggles inflation woes with supply fears

Brent crude futures for October settlement fell 9 cents to $105 a barrel by 0841 GMT, after climbing 4.1% on Monday, the biggest increase in more than a month


Photo: Bloomberg

Reuters London
Oil prices were stable on Tuesday as the market balanced supply concerns with fears that an inflation-induced weakening of global economies would soften fuel demand.
Brent crude futures for October settlement fell 9 cents, or 0.09%, to $105 a barrel by 0841 GMT, after climbing 4.1% on Monday, the biggest increase in more than a month.
The October contract expires on Wednesday and the more active November contract was at $103.03 a barrel, up 0.1%.
U.S. West Texas Intermediate crude was at $97.18 a barrel, up 17 cents, or 0.18%, following a 4.2% rise in the previous session.
Inflation is near double-digit territory in many of the world's biggest economies, a level not seen in close to a half century. This could prompt central banks in the United States and Europe to resort to more aggressive interest rate hikes that could curtail economic growth and weigh on fuel demand.
The price fall was capped by the prospect of tighter supplies.
Saudi Arabia last week raised the possibility of production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, known as OPEC+, which sources said could coincide with a boost in supply from Iran should it clinch a nuclear deal with the West.
The group is due to meet on Sept. 5.
"Possible reduction in OPEC+ production is the reason why the oil market has thumbed its nose at weakening equities and the strong dollar," said Tamas Varga of oil broker PVM.
Russia is set to reduce oil and gas condensate production in August by 2% from July, the Kommersant newspaper said on Tuesday, citing sources familiar with the data, as Gazprom cuts output.
And political violence on Monday night in Iraq, OPEC's second-largest producer, supported prices.
The American Petroleum Institute, an industry group, is due to release data on U.S. crude inventories at 4:30 p.m. EDT (2030 GMT) on Tuesday.
U.S. crude oil stockpiles likely fell 600,000 barrels in the week to Aug. 26, with distillates and gasoline inventories also seen down, a preliminary Reuters poll showed on Monday. [EIA/S]
(Reporting by Rowena Edwards, additional reporting by Muyu Xu in Singapore; Editing by Christian Schmollinger)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Aug 30 2022 | 3:31 PM IST

Explore News