🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

Oil Heads For Fourth Straight Monthly Loss as OPEC Meeting Looms

Published 09/30/2022, 01:26 PM
© Reuters
GBP/USD
-
LCO
-
CL
-
NYF
-
DXY
-

By Ambar Warrick 

Investing.com-- Oil prices rose slightly on Friday, but were set for a fourth straight month of losses amid growing concerns over weakening demand, with focus now turning to a potential supply cut by the OPEC next week. 

London-traded Brent oil futures, the global benchmark, were flat at $87.50 a barrel by 21:55 ET (01:55 GMT), while U.S. West Texas Intermediate crude futures rose 0.4% to $81.56 a barrel. Both contracts were set to lose about 9% in September. 

Prices took mixed signals from Chinese manufacturing data on Friday. While the official government reading showed that activity expanded in September, a private survey showed that activity sank far more than expected. 

Oil prices tumbled from annual highs this year amid growing concerns that rising interest rates will crimp economic activity, weighing on crude demand. Several major central banks, led by the Federal Reserve, have adopted an extremely hawkish stance this year. 

The Fed’s rate hikes boosted the dollar, which dented crude demand by making imports more expensive. The U.S. government has also drawn steadily from its Strategic Petroleum Reserve this year, increasing supply. 

Fears of an economic meltdown in the UK, as the pound crashed to record lows, rattled crude markets. A swathe of weak economic readings from China, the U.S., and the Eurozone this month also battered crude prices with the prospect of more demand destruction. 

But the consistent crude losses have spurred speculation that the Organization of Petroleum Exporting Countries will trim production when it meets next week. Several members of the group have flagged potential measures to support prices. 

Oil prices were set to end the week higher on that notion. WTI futures were up 3.4% this week, while Brent was set to add over 1%, with both contracts also breaking a four-week losing streak.

Weakness in the dollar, as investors locked in profits at 20-year highs, also benefited crude prices, as did data showing an unexpected decline in U.S. crude stockpiles

Oil prices could potentially benefit from more tightening supply in the fourth quarter, particularly in light of an escalation in the Russia-Ukraine conflict. A harsher-than-expected European winter could also tighten supply by pushing up the use of heating oil.

But crude markets still have to contend with slowing economic growth amid steadily rising interest rates.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.