Oil prices steadied today ahead of key US economic data after rising over 1% in the last session on cuts to OPEC+ production targets.
Brent crude futures slipped 11 cents to $94.31 a barrel early this morning.
WTI crude futures were down 5 cents to $88.40 a barrel, after earlier hitting $89.37 per barrel, the highest since September 14.
A stronger dollar added pressure on oil prices amid a chorus of hawkish Federal Reserve speakers signaling further aggressive central bank policy tightening.
Fed officials showed no intention of backing down from the most aggressive rate hike campaign in decades, with Fed Governor Lisa Cook, Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari all stressing that the inflation fight was ongoing and they were not prepared to change course.
Markets are keenly watching the US nonfarm payrolls report due later today, with economists forecasting 250,000 jobs to have been added last month, compared with 315,000 in August.
However, both benchmarks were headed for weekly gains, fuelled by production cut announcement by OPEC+.
The cut from the Organization of Petroleum Exporting Countries and allies including Russia, together known as OPEC+, is the largest reduction since 2020 and comes ahead of a European Union embargo on Russian oil.
The decision would squeeze supplies in an already tight market, adding to inflation.
“Market sentiment was already bearish in anticipation of a weakening global economy, and this decision should further tighten the market,” analysts at ANZ Research said in a note.
Tightening monetary policy and China’s ongoing Covid-related movement restrictions mean global demand growth is expected to come under pressure, ANZ added.
US President Joe Biden expressed disappointment yesterday over OPEC+’s plans and he and officials said the US was looking at all possible alternatives to keep prices from rising.
Some of those options include releasing more oil from the Strategic Petroleum Reserve or exploring a curb on energy exports by US companies.