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Saudi Arabia, top producer in the Organization of the Petroleum
Exporting Countries (OPEC) last week raised the possibility of
production cuts, which sources said could coincide with a boost
in supply from Iran should it clinch a nuclear deal with the
West.
Brent crude was up 55 cents, or 0.5%, to $101.54 a barrel by
1025 GMT, extending last week's 4.4% rally. U.S. West Texas
Intermediate (WTI) crude was up 62 cents, or 0.7%, at $93.68
after rising by 2.5% last week.
"Oil prices are inching higher on hopes of a production cut from
OPEC and its allies to restore market balance in response to the
revival of Iran's nuclear deal," said Sugandha Sachdeva, vice
president of commodity research at Religare Broking.
OPEC+, comprising OPEC, Russia and allied producers, meets to
set policy on Sept. 5.
The price of crude oil has surged this year, with Brent coming
close to a record high of $147 in March as Russia's invasion of
Ukraine exacerbated supply concerns. Rising fears over high
interest rates, inflation and recession risks have since weighed
on the market.
Oil's gain was limited by a strong U.S. dollar, which hit a
20-year high on Monday after the Federal Reserve chairman
signalled that interest rates would be kept higher for longer to
curb inflation. [USD/]
"While a strong dollar restrains broad commodity prices, the
undersupply issue in the oil markets will probably continue to
support the upside bias," said CMC Markets analyst Tina Teng.
Unrest in Libya's capital at the weekend, resulting in 32
deaths, sparked concern that the country could slide into a
full-blown conflict and disrupt in oil supply from the OPEC
nation.
(Reporting by Alex Lawler; Additional reporting by Mohi Narayan
in New Delhi and Sonali Paul in Melbourne; Editing by David
Goodman)
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