Oil Gains as Market Expects OPEC+ Output Cuts
Amidst global economic uncertainties, the crude oil market remains strong while the US-Iran nuclear deal holds. At the same time, the market is projecting output cuts ahead of the Organisation of Petroleum Exporting Countries (OPEC) meeting.
On Friday, crude oil prices edged higher after the latest round of US economic data and the US Federal Reserve’s support of the hawkish narrative suggests the US economy is still in a good position to handle more rate increases, OANDA analyst Edward Moya said in a note.
This adds to reports that the Organization of the Petroleum Exporting Countries and allied producers are seriously considering production, Moya noted, which comes after Saudi Arabia’s warning of possible production cuts.
Oil is expected to form a key trading range until Fed Chair Jerome Powell’s speech at Jackson Hole, Moya said. After the speech, the US dollar could see a major move. The oil fundamentals still support crude prices moving above $100 per barrel, but the market will wait and see if the dollar cooperates, the analyst said. READ: Oil Falls as Market Keeps Tab on US-Iran Nuclear Deal
Meanwhile, a move back to lower than $90/b in the near term would be hard to come by due to OPEC+’s position, unless a nuclear deal between the US and Iran materializes and OPEC+’s appetite for cuts is put to the test, OANDA analyst Craig Erlam said in a separate note. #Oil Gains as Market Expects OPEC+ Output Cuts