Oil: Picks up the week’s losses on reduced expectations from S.Arabia

Oil prices are trying to cover part of the week’s big losses, following a controlled upward trend after a report said that the US does not expect an immediate increase in production from Saudi Arabia.

In particular, Brent for September delivery sees its price increase by 2% or 1.9 dollars and moves to 101.03 dollars per barrel.

Similarly, US August WTI crude rose 1.6% to $97.28 a barrel, up $1.50.

Crude oil prices have fallen sharply in recent weeks, falling below $100 for some time, as fears of an impending recession that will hit energy demand grow.

Today’s recovery is largely supported by a Reuters report, which cited a US official as saying that the US does not expect to see an immediate increase in Saudi production, as President Biden, who is visiting the Persian Gulf country, will request today.

Expectations for such a possibility are focused on the OPEC+ meeting on August 3, according to the same publication.

In any case, Joe Biden will meet today in Jeddah with the de facto leader of Saudi Arabia, Mohammed bin Salman, in a move seen as a step to mend relations between the two countries that had deteriorated after the murder of journalist Jamal Khashoggi.

Elsewhere, oil had already started gaining momentum yesterday after statements from Fed officials indicated that the central bank would likely stick to its plan to raise interest rates by 75 basis points (0.75%) rather than 100. , as the market had begun to bet with the beastly inflation at 9.1%.

It is characteristic that after two days bets on the related futures again showed a lead in the possibility of 75 bp.

“Oil is trading largely on the Federal Reserve’s pace, under the effects its policy could have on both crude demand and the dollar,” notes Stephen Innes of SPI Asset Management.

“With the market returning to the 75 bp increase from yesterday’s 100, oil prices and the broader market appear to have taken some more margin today,” he adds.