NextGen Day

In the early hours of trading on Wednesday, crude oil prices fluctuated due to supply concerns and expectations for a highly anticipated meeting of the OPEC+ group as well as an anticipated increase in US crude oil stocks, the world’s largest oil consumer.

At 9:29 a.m. local time (06:29 GMT), international benchmark Brent crude was trading at $100.52 a barrel, down 0.02 percent from the previous session’s closing price of $100.54 a barrel.

West Texas Intermediate (WTI), the American benchmark, was trading at $94.39 a barrel at the same time, down 0.03 percent from the previous session’s closing price of $94.42 per barrel.

Late on Tuesday, the American Petroleum Institute (API) said that it expected US crude oil stocks to grow by almost 2.2 million barrels compared to the market’s expectation of a decline of 467,000 barrels.

The US is the world’s biggest oil consumer, and the anticipated increase in stockpiles indicates a decline in US demand for crude, which will pull prices lower.

Prior to the OPEC+ meeting later on Wednesday, market volatility is expected to be exacerbated by the OPEC+ production plan uncertainty for September.

Christof Ruhl, a senior research scholar at the Center on Global Energy Policy of Columbia University in New York City, stated in his daily energy markets review for Gulf Intelligence Consultancy firm, “The group has gone quiet because they seem to be caught between their inability to increase output anywhere close to quotas and being the central bank of oil.”

How to retain Russia in the fold is a crucial issue, according to Ruhl, “since a body like OPEC+ is more successful the more members it has.”

“Russia and the core OPEC members, in my opinion, have a strong incentive to stick together and come up with a fresh plan for navigating these turbulent waters. They may temporarily back off from making substantial market-managing pronouncements, but the next time oil prices fall drastically, they will gain importance once more “Added Ruhl.

Ruhl anticipates that oil prices will maintain around $100 per barrel in the third quarter of the year despite several uncertainty.

The crackdown in China, an anticipated recession, a slowdown in economic growth, and safety valves like the SPR release and the potential for increased production from Iran and Nigeria all contributed to the decline in oil prices. Therefore, I am rather pessimistic and anticipate that supply will outpace demand in the second half of the year, he said, adding that the largest unknown is the effect of ongoing sanctions on Russian oil production capacity.

The strengthening of the dollar has stifled increases in crude oil prices, which are pegged to the US currency.

The American dollar’s value against a basket of currencies, including the British pound, Canadian dollar, Swedish krona, and Swiss franc, is measured by the US dollar index, which increased 0.03 percent to 106.28.

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