Oil prices recoup some losses as attention shifts to possible supply cuts – Reuters

An aerial view shows oil tanks of pipeline operator Transneft at the Kozmino crude oil terminal on the shore of Nakhodka Bay near the port city of Nakhodka, Russia, June 13, 2022. Photo taken with a drone. REUTERS/Tatiana Meel

September 27 (Reuters) – Oil prices rose on Tuesday, after plunging to their lowest level in nine months a day earlier, on indications that the OPEC+ producer alliance could enact production cuts to avoid a further price collapse.

Brent futures for November settlement rose 65 cents, or 0.77%, to $84.71 a barrel at 0502 GMT. U.S. West Texas Intermediate (WTI) crude futures for November delivery rose 64 cents to $77.35 a barrel.

In the previous two trading sessions, Brent plunged 7.1% while WTI fell 8.1% under the double pressure of a rising dollar that makes dollar-denominated crude more expensive for traders. buyers using other currencies and growing fears that rising interest rates will trigger a recession that will reduce demand for fuel.

Tuesday’s decline in the greenback brought some relief to the oil market. The dollar index was down a little from the 20-year high reached the day before.

Officials of major producers reacted to the declines of the past few days by indicating that they could take measures to maintain price stability.

Iraqi Oil Minister Ihsan Abdul Jabbar said on Monday that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, known as OPEC+, were monitoring the oil price situation, hoping maintain balance in the markets.

“We don’t want a sharp increase in oil prices or a collapse,” he said in an interview with Iraqi state television.

Analysts said further selling in oil markets could see OPEC+ step in to support prices by collectively cutting their output.

“If we are to see any cuts, they will need to be a bit larger than the 100,000 barrels per day (bpd) agreed at the last meeting in order to have a meaningful impact on the market,” ING analysts said. Economics in a statement. Remark.

OPEC+ boosted output this year after record cuts put in place in 2020 due to demand destruction caused by the COVID-19 pandemic. However, the organization has failed in recent months to meet its planned production increases, undermining the effectiveness of any announced production cuts. Read more

The disruption caused by the Russian-Ukrainian war adds to a jittery market amid a lack of clarity over the planned European Union price cap on Russian oil exports which is expected to begin in December.

“Cyprus and Hungary are among the countries that have expressed opposition to the proposal. A deal was expected to be reached this week, but that now looks unlikely,” ANZ Research said in a note.

The expected landfall of Hurricane Ian on Monday caused BP Plc (BP.L) and Chevron Corp CVX.N to halt production at offshore oil rigs in the Gulf of Mexico, the world’s largest producing region. United States offshore.

The Category 2 storm was in the Caribbean and is expected to become a major hurricane within two days.

Reporting by Mohi Narayan in New Delhi, additional reporting by Laila Kearney in New York; Editing by Kenneth Maxwell and Christian Schmollinger

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