Oil prices fell on Friday, erasing gains made in the previous session, as the dollar continued to rise.
The dollar’s rise comes thanks to bets that the US central bank will present plans to raise interest rates in order to curb inflation.
Oil prices today
US West Texas Intermediate crude futures fell 26 cents, or 0.3%, to $81.33 a barrel by 0128 GMT, after gaining 25 cents on Thursday.
Brent crude futures fell 25 cents, or 0.3%, to $82.62 a barrel, erasing yesterday’s gains.
And the two contracts are heading towards ending the week almost unchanged after sharp moves up and down driven by the rise of the dollar and speculation about whether the administration of US President Joe Biden will release oil from the Strategic Petroleum Reserve to calm prices.
There are positive signs regarding demand with the air travel recovery accelerating, but the tightening of monetary and fiscal policy and the coming winter in the northern hemisphere will be disincentive to these indicators.
On Thursday, the Organization of Petroleum Exporting Countries (OPEC) lowered its forecast for oil demand in the fourth quarter by 330,000 barrels per day from last month’s forecast, as high energy prices curb the recovery from the Covid-19 pandemic.
Baden Moore, an analyst at National Australia Bank, said he expects the oil market to remain tight into the third quarter of 2022 as demand continues to recover.
And he considered that “OPEC + is very shrewd in its management of global supplies with the recovery of demand from the pandemic.”
OPEC+, which includes OPEC, Russia and allies, agreed last week to stick to plans to add 400,000 barrels per day to the market per month.
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