|
Brent crude futures were down by 67 cents to $89.37 a barrel at
0822 GMT. U.S. West Texas Intermediate crude (WTI) futures
traded at $86.05 a barrel, also down 64 cents.
Against a basket of currencies, the dollar was at 104.75, not
far off the six-month high of 104.90 touched overnight. A
stronger dollar can weigh on oil demand by making the fuel more
expensive for holders of other currencies.
"The reason the market gave back half of the gains and is
listless this morning, is because within the language of the
joint announcement there is a caveat that these cuts will be
reviewed on a monthly basis," said John Evans of oil broker PVM.
"This flexibility add-in allows for wiggle room, but the market
smells a taper," he said, citing conditions like anti-inflation
battles in the U.S. and other countries, whether crude prices
near $100 a barrel, or the effect on Saudi oil revenues.
Reflecting supply concerns in the near term, the front-month
Brent futures traded near 9-month highs at $4.13 a barrel above
prices in six months.
For U.S. WTI futures, the spread between front-month and the
six-month contract widened to as much as $4.88 a barrel on
Wednesday, also hovering near nine-month highs.
Saudi Arabia and Russia on Tuesday extended their voluntary oil
cuts to the end of the year, the former to the tune of 1 million
barrels per day (bpd) and the latter by 300,000 bpd. These are
on top of the April cut agreed by several OPEC+ producers
running to the end of 2024.
Both countries will review their decisions monthly to consider
deepening cuts or raising output depending on market conditions.
But rising oil prices could be restrained if crude demand dips
as U.S. refineries enter their September-October maintenance
period, said Sugandha Sachdeva of Acme Investment Advisors.
Elsewhere, Iranian crude supply rises could hobble price gains:
"Iran is producing close to 3.1 million barrels per day (bpd)
and plans to pump around 3.4 million bpd," ING Economics
analysts noted.
(Reporting by Paul Carsten in London, Mohi Narayan in New Delhi;
Additional reporting by Arathy Somasekhar in Houston; Editing by
Stephen Coates, John Stonestreet and David Evans)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
