On Monday, oil prices remained shaky despite tight supplies, while producers, Saudi and Russia, extended cuts until year ends.
As the market opened, West Texas Intermediate futures (WTI) in October delivery was down by -0.58% to $87.00 per barrel. In addition, Brent futures in November fell by -0.24% to $90.43 per barrel on September 11’s Asian morning session.
On the other hand, Saudi Arabia and Russia extended their nonmandatory cuts until the year ended. The Organization of the Petroleum Exporting Counties (OPEC) disclosed that the combined output will be 1.3 million barrels per day.
The International Energy Agency (IEA) and OPEC expected the oil price hike due to low production this year.
Meanwhile, the Federal Reserve (Fed) meeting is set to happen next week. Markets are closely observing inflation data that will be released this week as the Fed’s basis for interest rate decisions.
This week’s decline also resulted in China’s low consumption as post-pandemic recouping is still ongoing. Moreover, reports show that typhoon Haikui had a severe impact on businesses that resulted in weak consumer output.
Last week was momentum for both Brent and WTI as they gained a significant percentage. Brent rose 5.00% and WTI had a 7.00% increase.
Analysts said that any sighting of high demand for oil, IEA and OPEC will urge to continue to price spike.
Experts Predict Oil Hike due to Low Consumption
Analysts foresee that the high oil price resulted in China’s slow recovery and the US’s low output.
Furthermore, price hikes lower the trajectory of the economy as consumers and businesses are compelled to grapple with the increases.
On other reports, analysts expect Brent to reach $100.00 per barrel if it continues to gain boost in the market.
Meanwhile, experts urge the Federal Reserve to hold interest rates at their upcoming meeting. However, the Fed will consider the call out if the inflation rate declines before deciding.
Analysts predict that high-interest rates may result in slow economic growth and may cut oil demands.
