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Oil settles lower after hitting $90/bbl as OPEC+ considers output cut By Reuters


© Reuters. FILE PHOTO: Pump jacks operate at sunset in Midland, Texas, US, Feb. 11, 2019. Photo taken Feb. 11, 2019. REUTERS/Nick Oxford/File Photo

By Shariq Khan

NEW YORK (Reuters) – Oil prices moved lower in tumultuous trading Thursday, soared above $90 a barrel and then retreated as traders weighed the deteriorating economic outlook against possible OPEC+ production cuts next week.

futures fell 83 cents at $88.49 a barrel, after rising to $90.12 during the session. November futures came in 92 cents lower at $81.23 a barrel.

Leading members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have begun talks at their next meeting on Oct. 5 about cutting oil production, three sources told Reuters.

An OPEC source told Reuters that a cut was “probable”, while two other OPEC+ sources said key members had spoken on the subject.

Reuters reported this week that Russia is likely to propose that OPEC+ cut oil production by about 1 million barrels per day (bpd).

“Right now, the oil market is teetering between the Fed-induced destruction of demand and tight oil supplies,” said Ryan Dusek, director of the Commodity Risk Advisory Group at Opportune LLP.

US stock markets collapsed on concerns that the Federal Reserve’s aggressive fight against inflation could hamper the US economy, and because investors worried about a defeat in global currency and debt markets. [.N]

“Amid so much uncertainty, seesaw trading could be common in the coming week unless we get more clarity from OPEC+ sources about the likely size of any adjustment and what this means for past missed quotas,” said Craig Erlam, senior market analyst at OANDA. .

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The market also calmed down as the threat from Hurricane Ian eased and U.S. oil production is expected to return in the coming days after about 158,000 bpd in the Gulf of Mexico closed on Wednesday, according to federal data.

In China, the world’s largest crude oil importer, travel will hit its lowest level in years during the upcoming week-long national holiday as Beijing’s zero-COVID rules keep people at home while economic problems curb spending.

Raw benchmarks continue to pick up weekly gains after a four-week loss streak. At the beginning of this week, they rebounded from a nine-month low, buoyed by a dip in and a larger-than-expected decline in US fuel inventories. [USD/][EIA/S]

The dollar index fell again on Thursday, easing its 20-year highs, signaling some more risk taking from investors.

Further support for oil prices could come from the United States announcing new sanctions against companies that facilitated Iran’s oil sales. [nL1N3102AF]

“I think traders have almost given up on a nuclear deal and this US announcement appears to be a make or break move,” Erlam said.

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