Oil prices calmed on Friday ahead of key US economic data after rising more than 1% in the last session amid cuts to OPEC+ production targets.
Brent crude futures fell 11 cents to $94.31 a barrel as of 0339 GMT. WTI crude futures hit $89.37 a barrel and fell 5 cents to $88.40 after hitting the highest level since Sept. 14.
The stronger dollar added to the pressure on oil prices with hawkish Federal Reserve rhetoric signaling more aggressive central bank policy tightening.
Fed officials show no intention to step back from the most aggressive rate hike campaign in decades, while they stress the fight against inflation for which they mention that they are not prepared.
Markets are eagerly watching the US nonfarm payrolls report, due later on Friday, and economists estimate 250,000 jobs will be added last month, compared to 315,000 in August.
Oil to Asia is going at low levels. The massive price increases this weekend is not so unusual, especially given rising US yields and a stronger dollar driving the downside, triggering pre-weekend nonfarm payroll profits.
However, fueled by the output cut announcement by OPEC+, both benchmarks turned to weekly gains.
The cut from the Organization of the Petroleum Exporting Countries and its allies, including Russia, is the biggest drop since 2020 and comes ahead of a European Union embargo on Russian oil. The decision will increase inflation by compressing supply in an already tight market.
Blinken says the US is reviewing ‘response options’ for Saudi relations following the OPEC+ cuts, while US lawmakers say Biden is questioning Saudi arms sales while considering the OPEC response.
Market sentiment was already declining in anticipation of a weakening global economy, and this decision will tighten the market further. With monetary policy tightening and China’s continued COVID-related movement restrictions, global demand growth is bound to come under pressure.
The US expressed disappointment with OPEC+’s plans on Thursday, and officials said the US is looking for all possible alternatives to prevent prices from rising.
Some of these options include releasing more oil from the Strategic Petroleum Reserve or restricting US companies’ energy exports.
Swedish police said they found evidence of explosions in the Nord Stream investigation.
