Oil rises on settlement, supply problems outweigh fears of slowing demand

20 September, 2022
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Oil rises on settlement, supply problems outweigh fears of slowing demand

Oil prices rose slightly in choppy trading, as fears of tight supplies outweighed fears of slowing global demand due to the strength of the US dollar and potentially large interest rate hikes.


Brent crude for November delivery rose 65 cents, or 0.7%, to settle at $92 a barrel, while the price of US West Texas Intermediate crude for October delivery rose by 62 cents, or 0.7%, to $85.73 a barrel.


An internal document showed that the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, the bloc known as "OPEC +", did not reach the target oil production of 3.583 million barrels per day in August. In July, "OPEC +" failed to achieve its target of 2.892 million barrels per day.


“Surveys about OPEC+ not meeting the August production target make the market feel that it is simply unable to ramp up production if the market demands it,” said Andrew Lipow, president of Lipow Oil Associates in Houston.


The world's central banks will almost certainly raise interest rates this week, and the Federal Reserve may raise rates by a percentage point.


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