| 24 June 2024, Monday |

Oil rebounds from three-week low despite stronger dollar

Oil prices recovered after hitting a three-week low on Tuesday, as investors weighed a stronger U.S. dollar, darkening global economic signals and tightening supply.

Brent crude oil futures were up 55 cents to $91.26 a barrel by 1:01 p.m. EDT (1701 GMT), after falling to a session low of $89.50, the lowest price since Sept. 8.

U.S. West Texas Intermediate crude (WTI) , rose 82 cents to $89.64 per barrel. Earlier in the session, prices fell to $87.76, the weakest since Sept. 12.

Weighing on prices earlier, the U.S. dollar (.DXY) rose to a 10-month high against a basket of major peers after U.S. job openings data pointed to a still-tight labor market that could prompt the Federal Reserve to raise interest rates next month.

“We have seen an incredible increase in the yields and the dollar and that’s raised concerns about demand going forward,” said Phil Flynn, an analyst at Price Futures Group.

Higher interest rates and a stronger dollar make oil more expensive for holders of other currencies, which could dampen oil demand.

Investors kept an eye on any supply updates, as expectations of tighter supply loom large following the decision last month by Saudi Arabia and Russia to extend output cuts to the end of the year. The two countries are part of the Organization of the Petroleum Exporting Countries and allies, known as OPEC+.

The producer group is expected to keep its output policy unchanged when it meets on Wednesday, keeping supplies tight.

Saudi Arabia is expected to raise its November official selling price of Arab Light crude to Asia for a fifth straight month, according to a Reuters survey.

Meanwhile, Russia is setting no time frame for a fuel export ban it introduced last month, and it will remain in place as long as necessary to stabilize prices and address shortages on the domestic market, Interfax cited Deputy Prime Minister Alexander Novak as saying.

Talks to restart Iraqi oil exports via a crude oil pipeline that runs through Turkey are still ongoing, an Iraqi oil official told Reuters on Tuesday, a day after Turkey said operations would start again this week after nearly a six-month stoppage.

“In theory, under the terms of the OPEC+ deal, production (outside the Gulf Cooperation Council) should remain flat over Q4. However, Iraq’s compliance has been somewhat spotty in the past and export levels should be expected to rise, assuming the pipeline resumes operations as planned,” BMI Research analysts said.

Iraq, which is OPEC’s second-biggest producer, also said on Tuesday that it would award 30 new oil and gas projects in its fifth and sixth licensing rounds.

Market participants were awaiting the release later on Tuesday of weekly industry data on U.S. crude stockpiles. U.S. crude inventories were expected to have fallen by about 500,000 barrels last week, a preliminary Reuters poll showed on Monday.


  • alarabiya