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Oil prices rise on signals OPEC might cut output

Commodities Aug 26, 2022 04:01PM ET
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© Reuters. FILE PHOTO: An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS
 
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By Stephanie Kelly

NEW YORK (Reuters) -Oil prices ended higher on Friday, boosted by signals from Saudi Arabia that OPEC could cut output, but trading was volatile as investors digested and ultimately shrugged off warnings from the head of the U.S. Federal Reserve about economic pain ahead.

Brent crude futures rose $1.65 to settle at $100.99 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 54 cents to settle at $93.06 a barrel. Both contracts rose and fell by $1 throughout the session.

Overall, Brent gained 4.4% for the week, while WTI was set to rise 2.5%.

The United Arab Emirates became the latest OPEC+ member to state it is aligned with Saudi Arabia's thinking on crude markets, a source with knowledge of the matter told Reuters.

On Monday, Saudi Arabia flagged the possibility of production cuts to offset the return of Iranian barrels to oil markets should Tehran clinch a nuclear deal with the West.

"The impression remains that Saudi Arabia is not willing to tolerate any price slide below $90. Speculators could view this as an invitation to bet on further price rises without the need to fear any more pronounced price declines," Commerzbank (ETR:CBKG) said in a note.

Oil prices briefly fell after Fed Chair Jerome Powell said tight monetary policy may be in store "for some time" to fight inflation, meaning slower growth, a weaker job market and "some pain" for households and businesses.

Data has shown some small decline in inflation, with the Fed's personal consumption expenditures price index falling in July to 6.3% on an annual basis, from 6.8% in June. Inflation expectations based on the University of Michigan's measures also eased in July.

But "a single month's improvement falls far short" of what the Fed needs to see, Powell said.

"The market is concerned that Powell sounded a bit more hawkish when it came to inflation," said Phil Flynn, an analyst at Price Futures group in Chicago.

Meanwhile, some European Central Bank policymakers want to discuss a 75 basis point interest rate hike at a Sept. 8 policy meeting, even if recession risks loom, as the inflation outlook is deteriorating, five sources with direct knowledge of the process told Reuters.

In U.S. supply, the oil drilling rig count, an indication of future production, rose by 4 to 605 in the week to Aug. 26, Baker Hughes Co said on Friday.

Money managers raised their net long U.S. crude futures and options positions in the week to Aug. 23 by 24,215 contracts to 179,039, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Oil prices rise on signals OPEC might cut output
 

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David Stocks
David Stocks Aug 26, 2022 10:38PM ET
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opec messes wiyh us evrry day yet we refuse to buy EVs we must like abuse
Lucas P
Lucas P Aug 26, 2022 10:38PM ET
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Refuse? $65k for a Y and a 7 month wait. Families live paycheck to paycheck and don't have thousands laying around to invest in a lower fuel bill each month.
 
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