Oil sinks as demand fears take steam out of OPEC-led rally
- OPEC+ makes 100,000 bpd output cut for October
- EU's Borrell less optimistic of quick Iran nuclear deal revival
- U.S. holiday delays weekly inventory reports
- EU's Borrell less optimistic of quick Iran nuclear deal revival
- U.S. holiday delays weekly inventory reports
Oil prices fell on Tuesday as concern returned about the prospect of more interest rate hikes and COVID-19 lockdowns weakening fuel demand, reversing a two-day rally on OPEC+'s first output target cut since 2020.
Brent crude settled at $92.83 a barrel, losing $2.91, or 3%. US West Texas Intermediate (WTI) fell from Monday’s trading to settle at $86.88 a barrel, up 1 cent from Friday’s close.
The U.S. benchmark had been trading since Sunday without settlement due to the Labor Day holiday. WTI prices are down more than 2% from the usual time of settlement on Monday, Refinitiv Eikon data show.
“The OPEC+ news is now in the market and the focus has temporarily shifted to economic and inflationary concerns amongst which the two relevant factors are the extended COVID lockdowns in China and Thursday’s ECB rate decision,” said Tamas Varga of oil broker PVM.
China has eased some COVID-19 curbs but extended lockdowns in Chengdu, which added to worries that high inflation and interest rate hikes will hit oil demand. The European Central Bank is widely expected to lift rates sharply when it meets on Thursday.
A stronger US dollar, which was up about 0.6% on better-than-expected US services industry data, also put pressure on oil prices.
The Organization of Petroleum Exporting Countries and allies led by Russia, known as OPEC+, decided on Monday to cut their October output target by 100,000 barrels per day (bpd). Prices rose on Friday ahead of the meeting and after the decision.
As a result of the Labor Day holiday, weekly US inventory reports from the American Petroleum Institute and Energy Information Administration will be released on Wednesday and Thursday, a day later than usual. $SPDR S&P 500 ETF(SPY.US$ $S&P 500 Index(.SPX.US$ $Camber Energy(CEI.US$ $Imperial Petroleum(IMPP.US$ $Occidental Petroleum(OXY.US$
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David W Clark : Really this is a mixed question and answer. As an investor I want oil prices to go up for the PROFIT! But as a consumer/ buyer of gas and diesel fuels I want oil prices to go down to lower the prices at the pumps.
ANC Investments : Yea mixed question as a play oil going up isn't that bad but when transportation is your business it's not fun at the pump
easygoing Lyon : I want production to increase and price to fall so profits stay up. Reaganomics!
efficentupupOP easygoing Lyon: cool
efficentupupOP ANC Investments: That is what most people think
efficentupupOP David W Clark: If we didn't invest in oil, then we would want oil prices to fall