NEW YORK – Oil prices closed mixed today, a day after major producers announced a modest output cut.
The West Texas Intermediate for October delivery added 1 cent to settle at US$86.88 (RM389.57) a barrel on the New York Mercantile Exchange. Brent crude for November delivery decreased US$2.91 to close at US$92.83 a barrel on the London ICE Futures Exchange.
Strength in the US dollar continued to present a headwind. The dollar index, which measures the greenback against six major peers, rose 0.35% to 110.2140 in late trading today. Historically, the price of oil is inversely related to the price of the US dollar.
The Organisation of the Petroleum Exporting Countries (Opec) and its allies, collectively known as Opec+, yesterday decided to reduce oil production in October by 100,000 barrels per day. This will reverse the September production hike of the same amount that was agreed about one month ago.
Despite the relatively trivial amount, yesterday’s decision “sent a message that the oil exporting group is willing to defend the oil price,” said UBS analysts.
“It became clear yesterday that Opec+ is not willing to accept any more pronounced price slide, and is likely to implement further production cuts if it believes them to be necessary,” energy analysts at Commerzbank Research said today in a note. – Bernama, September 7, 2022
