Oil prices up amid OPEC+ group’s supply delay, strong demand data from US

Oil prices rose on Friday with the OPEC+ group’s decision to postpone production increase, the strong demand data from US, and uncertainties regarding the size of the interest rate cut steps to be taken by the US Federal Reserve (Fed) in the next period.

International benchmark Brent crude increased 0.33% to $72.94 per barrel at 10.42 a.m. local time (0732 GMT), up from the previous session’s close of $72.70.

US benchmark West Texas Intermediate (WTI) rose 0.20% to $69.05 per barrel, after closing at $68.91 in the prior session.

Price increases were supported by the decision of the OPEC+ group, which consists of OPEC and some non-OPEC producing countries, to postpone the production increase planned to start in October after the decline in prices.

The decision feeds market players’ concerns about global oil supply, lent support to prices.

Meanwhile, both benchmarks experience upward movement with data released late Thursday by the Energy Information Administration (EIA).

US commercial crude oil inventories declined by about 6.9 million barrels to 418.3 million barrels during the week ending Aug. 30 compared to the market prediction of a fall of around 600,000 barrels, the EIA showed.

On the other hand, uncertainties regarding the size of the interest rate cut steps to be taken by the Fed continue to impact oil prices.

It is considered certain that the Fed will cut interest rates by 100 basis points by the end of the year, estimates that it might cut interest rates by 50 basis points in September have recorded as 43%.

It is anticipated that the country’s rate drop will weaken the US dollar against other currencies, boosting demand for oil.

The US dollar index fell by 0.24% to 100,89 at 10.37 a.m. local time (0737 GMT), compared to the previous trading session.

• Energy Information Administration (EIA)
• West Texas Intermediate (WTI)