Oil prices achieved their first weekly gains in five weeks, supported by the decline in the dollar, and the possibility that OPEC + will agree to reduce crude production when it meets on the fifth of October, despite the decline in the two crudes at the close in volatile trading yesterday.
According to “Archyde.com”, Brent crude futures for November recorded a decrease of 53 cents, or 0.6 percent, to $87.96 a barrel. The most active December contract was down $2.07 at $85.11.
US West Texas Intermediate crude futures fell $1.74, or 2.1 percent, to $79.49.
Both Brent and West Texas Intermediate rose more than 1 percent earlier in the session and achieved weekly gains of about 4 percent, their first weekly rise since August, after recording their lowest levels in nine months during the past days.
Oil prices rose, supported by the dollar’s decline earlier in the week from its highest levels in 20 years. The dollar’s decline makes US-denominated oil cheaper for holders of other currencies, which improves demand.
Analysts also expect the volume of purchases to increase as Russia begins annexing four Ukrainian regions yesterday, in a move that could prompt Washington to tighten sanctions on Moscow.
The market received new support from the possibility that the Organization of Petroleum Exporting Countries “OPEC” and its allies will cut production quotas at their meeting to be held on the fifth of October.
Analysts are likely to cut production because demand concerns related to a possible global economic recession and higher interest rates have weighed on crude oil prices. Brent and West Texas Intermediate prices ended the third quarter with a significant drop of 23 percent.
Analysts said the market appeared to have found ground, as supply is set to shrink with the European Union’s ban on Russian oil imports starting from Dec. 5. However, the main unknown is how much demand will fall as global growth slows in the face of higher interest rates.
“Basically, I continue to believe that prices are likely to rise due to tougher sanctions on Russia, lower global crude inventories and lower US Strategic Petroleum Reserve supplies,” said Baden Moore, a commodities analyst at National Australia Bank.
“I expect that OPEC is in a good position to manage supplies to offset the risks related to demand,” he added. Three sources said that prominent members of the Organization of Petroleum Exporting Countries “OPEC” and allies led by Russia “OPEC +” began discussing production cuts before their meeting next Wednesday.
And a source said early last week: Russia may propose a reduction of up to one million barrels per day.
In turn, calculations conducted by “Archyde.com” from the data of the Dubai Mercantile Exchange indicated that the official selling price of Omani crude will drop by $6.20 to $90.80 a barrel in November. The official selling price for November shipments of Omani crude is the average daily settlement price of crude at 08:30 GMT in September for the nearest month contract.
Calculations indicate that the official selling price of Dubai crude, set at a discount of $0.20 per barrel to the price of Omani crude, will be $90.60 per barrel in November.
On the other hand, in the footsteps of California, the state of New York has officially started on the path to banning new passenger vehicles that cause pollution by 2035, according to what New York Governor Cathy Hawkol announced.
The official had set this goal last year, but was forced for legal reasons to wait for the state of California to pass its own law in this area, which is what happened in August, Hokol said during a press conference yesterday.
The state can now move to the next stage, and the governor has asked her office to prepare appropriate texts, especially with preliminary targets for 2026 (35 percent of sales) and 2030 (68 percent of sales), before reaching 100 percent of 2035 sales.
On this date, all cars designated for city roads, four-wheel drive vehicles and “pickup” vehicles intended for transporting passengers must become zero-emissions, either in the form of electric vehicles, hybrids, rechargeable or running on hydrogen, and the text thus prohibits vehicles operating on fuel and diesel. The legislation is expected to tighten emissions rules for heat-engine vehicles. “We have preliminary stages to go to show that we are on the right track,” Hokol said.
Several countries have been trying for years to reduce pollution from the automobile sector. In this context, the United Kingdom and Singapore pledged to ban the sale of new vehicles running on fuel and diesel by 2030, while Norway made the same pledge by 2025.