[News] Oil futures higher on the week as traders watch for news on an Iran deal, OPEC production cuts

[FazzNoth]

U.S. oil futures fluctuated between losses and gains on Friday, but held onto a climb for the week, after remarks Federal Reserve Chairman indicated that more interest-rate hikes are on tap as the central bank continues its efforts to combat rising inflation.Speculation surrounding a possible production cut by major oil producers helped provide some support for the oil sector, but traders also kept an eye out for more news about a potential nuclear deal with Iran that could eventually lead to more oil on the global market.

 

Price action
West Texas Intermediate crude for October delivery fell 49 cents, or 0.5%, to $92.03 per barrel on the New York Mercantile Exchange, with prices fluctuating between losses and gains for the session. Front-month contract prices traded 1.8% higher for the week, FactSet data show.
The front-month October Brent crude oil contract traded flat at $99.34 a barrel on ICE Futures Europe, with prices up by 2.7% for the week.
Back on Nymex, September gasoline lost 6.8 cents, or 2.4%, to $2.7446 per gallon, while September heating oil gained 3.8 cents, or 1%, to $3.9867 per gallon.
Natural gas for September delivery traded nearly flat at $9.373 per million British thermal units, with prices up around 0.4% for the week.

 

What analysts are saying
“Bullish sentiments” arising from talk of potential production cuts by the Organization of the Petroleum Exporting Countries and their allies also known as OPEC+ was offset by an “unenthusiastic mood” painted by Federal Reserve Chairman Jerome Powell, said Manish Raj, chief financial officer at Velandera Energy Partners.

Powell delivered a blunt message that the Fed will keep at the job of bringing inflation down until it is done and that the fight will be costly in terms of jobs and economic growth.

In his speech, he drove home the point that the Fed has an “overarching focus right now to bring inflation back down to our 2% goal.” he left the door open for a 0.75 percentage point interest hike in September.

“High interest rates will certainly lower economic activity and oil consumption is no exception,” Raj told MarketWatch.

Economic data released Friday showed a key gauge of U.S. inflation fell 0.1% in July on the heels of declines in gasoline prices.

For the week, oil prices have risen as hopes for a nuclear deal with Iran were offset by comments about potential production cuts out of Saudi Arabia.

The comments from Saudi Arabia’s energy minister suggest international oil benchmarks won’t be allowed to trade below $90 per barrel without at least some verbal intervention from the Organization of Petroleum Exporting Countries and its allies, according to analysts at Commerzbank.

“Admittedly, sources close to OPEC stressed shortly afterwards that a production cut would probably only happen if Iran were to return to the oil market as a result of a new nuclear agreement. Nonetheless, the impression remains that Saudi Arabia is not willing to tolerate any price slide below $90,” Commerzbank team wrote.

https://www.msn.com/en-us/money/markets/oil-prices-rise-as-traders-await-news-about-iran-deal-opec-production-cuts/ar-AA117QF4?fromMaestro=true