Benchmark oil prices rose weakly on Friday morning after a sharp decline the day before, driven by a stronger dollar and worries about global fuel demand.
The price of November futures for Brent oil on the London ICE Futures exchange by 8:08 am UTC on Friday is $91.19 per barrel, which is $0.35 (0.39%) higher than the closing price of the previous session. As a result of trading on Thursday, these contracts fell by $3.26 (3.5%) to $90.84 per barrel.
The price of futures for WTI oil for October in the electronic trading of the New York Mercantile Exchange (NYMEX) is $85.30 per barrel by this time, which is $0.20 (0.24%) higher than the final value of the previous session. By the close of the market the day before, the value of these contracts fell by $3.38 (3.8%) to $85.10 per barrel.
“The dollar has rebounded strongly and is holding near recent highs amid a hawkish Fed policy outlook for the coming months,” StoneX energy analysts wrote in a note.
The September Fed meeting will take place next week, and the market is confident that the central bank will again raise its key rate by 75 basis points to slow down the continued high inflation in the US.
“For the near term, we remain cautious on oil prices as the global economy is under pressure from rising rates, undermining fuel demand,” Peter Cardillo, senior market economist at Spartan Capital Securities, wrote in a note.
