Image: Reuters Berita 24 English - Benchmark Brent oil went over $100 a barrel on Wednesday after Saudi Arabia said this week that OPEC mi...
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| Image: Reuters |
Berita 24 English - Benchmark Brent oil went over $100 a barrel on Wednesday after Saudi Arabia said this week that OPEC might cut output because the crude futures market isn't very liquid and people are worried about a global economic slowdown.
Brent for October settlement rose $1.30, or 1.3%, to $101.52 a barrel by 8:50 GMT, which was the highest price in three weeks. At $94.92, a barrel of U.S. crude was up $1.18, or 1.3%.
Contracts for both crudes went up on Tuesday after Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman said that the country might cut production because of low liquidity on the futures market and worries about the economy as a whole.
OPEC sources later told Reuters that any cuts by OPEC and its allies, known as OPEC+, were likely to happen at the same time as Iran's return to the market if Tehran reached a nuclear deal with the rest of the world.
On Monday, a U.S. official said that Iran had dropped some of its most important demands for getting a deal back on track.
Sources say that OPEC+ is already making 2.9 million barrels per day less than its goal, which makes it harder to decide whether to cut production or how to figure out the baseline for a cut.
"The oil price and supply outlook suggest that an OPEC+ cut is not necessary right now," PVM analyst Stephen Brennock said, pointing out possible threats to supply that are keeping the market up.
"As the peak of hurricane season in the U.S. draws near, the world's oil supply could be hurt," he said. "Elsewhere, future oil shortages can't be ruled out in Libya, and Nigeria's oil situation doesn't look like it's getting better."
For the week ending August 19, crude stocks in the U.S. dropped by about 5.6 million barrels, according to data from the American Petroleum Institute cited by market sources. In a poll by Reuters, analysts predicted a drop of 900,000 barrels. [API/S]
On Wednesday, the U.S. government will release its numbers. [EIA/S]
Friday, the speech by Federal Reserve Chair Jerome Powell at the Jackson Hole Central Bank Symposium will be watched by people in the market. He is likely to say that the Fed's main goal is to keep inflation under control.
