Although oil rose on Friday, it is ending a second consecutive week with loss as the dollar strengthened and concerns over supply shortages eased ahead of the Fed Chairman’s speech. Undoubtedly, the Fed’s policy outlook will be the main driving force for the upcoming markets.
Brent crude was up 39 cents, or 0.5%, to $83.75 a barrel as of 06:24 GMT, while West Texas Intermediate crude (WTI) was up 39 cents, or 0.5%, at $79.44 a barrel.
This week, crude oil prices are expected to fall between 1.2% and 2.2%, the second consecutive fall.
With new updates on US inflation and labor market data following the previous FOMC meeting, the focus will be on what factors Fed Chairman Jerome Powell will draw attention to in his remarks at the Jackson Hole Symposium.
Ahead of Powell’s remarks, the safe-haven dollar rallied to a 10-week high, its biggest gain in a month, while investors await news on how long market rates will stay high.
A strong dollar reduces demand by making oil more expensive for those who hold other currencies.
On the supply side, talks are still ongoing between Türkiye and Iraq’s semi-autonomous Kurdistan regional government on northern Iraqi crude oil exports, after authorities failed to agree on the resumption of oil exports earlier this week.
Türkiye stopped Iraqi oil flows via the Ceyhan port on March 25 after losing a long-standing arbitration case brought by Iraq
Iran’s oil minister said the market is closely monitoring the flow of Iranian oil, as the country’s crude oil production will reach 3.4 million barrels per day by the end of September, although US sanctions remain in place, he told state media.
Further increasing market sentiment, US officials are drafting a proposal that would ease sanctions on Venezuela’s oil sector and allow more companies and countries to import crude oil.
Norway’s Equinor said on Friday that it started production at the expanded Statfjord Ost field six months ahead of schedule and expects production to increase by 26 million barrels of oil equivalent.
The support of previous production cuts to oil prices has waned. The market expects Saudi Arabia to continue to expand voluntary production cuts.
Analysts predict that the largest oil exporter will shift its voluntary oil cut to October for the third consecutive month, as supply uncertainty and the kingdom seeks to further reduce global inventories.