Oil Prices Rise: Oil prices rose slightly on Monday, with Brent crude November futures at $88.58 and WTI October futures at $85.64. The rise is supported by predictions that Russia and Saudi Arabia will maintain tight oil supplies. An increasing belief that the Federal Reserve will sustain interest rates has also boosted the market. After two weeks of weakness, Brent and WTI contracts closed last week at their highest levels in over six months.
The oil price hike is driven by expected supply decreases from major oil producers. Last Thursday, Russian Deputy Prime Minister Alexander Novak declared that Russia and OPEC have agreed on export cut criteria. These cuts should be revealed this week. Russia will cut exports by 300,000 barrels per day (bpd) in September, following a 500,000 bpd cut in August. Saudi Arabia will likely prolong its voluntary 1 million bpd cut until October.
However, Acme Investment Advisors senior vice president and chief strategist Sugandha Sachdeva noted that rising U.S. oil production could limit oil price rises. At the APPEC conference in Singapore, Vitol CEO Russell Hardy warned that refinery maintenance should loosen the global oil market in six to eight weeks, but sour crude supplies will remain tight.
Also Read: Oil Prices Rise Amid Dollar Surge and Fed Announcement
Recent U.S. data implies job growth accelerated in August. The jobless rate jumped to 3.8%, slowing wage improvements. These considerations support forecasts that the Federal Reserve would not raise interest rates this month, preventing a slowdown in the U.S. economy. The oil market is optimistic due to this condition.
China, the world’s largest oil importer, saw surprising manufacturing growth in August, easing economic fears. Along with Beijing’s economic support measures, Caixin’s manufacturing PMI survey showed this favorable shift. These include deposit rate decreases at some of the nation’s top state-owned banks and homebuyer borrowing requirements loosening.
However, investors are still intently watching China’s property sector, which has slowed the economy since the outbreak. More substantial sector stabilization actions are expected. The Chinese economy relies on the property sector, which affects global oil demand as the world’s largest oil importer.
Overall, predictions of sustained supply cuts from Russia and Saudi Arabia are driving up global oil prices. This complex terrain also involves U.S. oil output and Federal Reserve policies. The United States and Chinese economic indicators are affecting market sentiment, with all eyes on the Federal Reserve’s interest rate decisions and China’s economic support measures. The oil market remains cautiously hopeful as several variables interact, but various factors could still pull prices in either direction.
Our Reader’s Queries
What is appec 2023?
APPEC stands out as the most esteemed conference in Asia’s Oil and Energy industry. It’s a hub for sharing innovative ideas and fostering business relationships in both regional and global markets. With its reputation for excellence, APPEC is the go-to event for industry leaders seeking to stay ahead of the curve.
What is the full form of Appec?
The Australian Government Department of Foreign Affairs and Trade is a member of the Asia-Pacific Economic Cooperation (APEC). This organization promotes economic cooperation and trade among its 21 member economies in the Asia-Pacific region. As a member, Australia participates in various initiatives and meetings to enhance economic growth and development in the region. APEC also provides a platform for member economies to address common challenges and work towards shared goals. The Australian Government Department of Foreign Affairs and Trade is committed to supporting APEC’s efforts towards a more prosperous and sustainable future for the Asia-Pacific region.