On Wednesday, oil prices increased somewhat due to supply worries, but gains were limited by investor concerns that another aggressive U.S. interest rate hike might trigger a recession and reduce demand for gasoline. Brent crude futures were up 11 cents, or 0.1%, to $90.73 per barrel after sliding $1.38 the day before. U.S. West Texas Intermediate crude was up 5 cents or 0.1% to $83.99 per barrel. On Tuesday, the more active November contract dropped $1.42, while the October delivery contract expired down $1.28.
According to Tina Teng, an analyst at CMC Markets, “The positive aspect is usually the undersupply issue that is created by sanctions on Russia.” “Iran’s nuclear agreement ran into problems, which won’t result in more supply any time soon.”
At this week’s U.N. General Assembly, the United States stated that it did not anticipate a breakthrough in restoring the 2015 Iran nuclear deal, which diminished the likelihood of Iranian barrels returning to the world market. The Organization of the Petroleum Exporting Countries and its allies, which includes Russia, together known as OPEC+, are currently falling 3.58 million barrels per day, or around 3.5% of the world’s demand, short of their production goals. The shortage draws attention to the market’s fundamental supply constraints.
Vandana Hari, the founder of Vanda Insights in Singapore, stated that “In the lack of any significant fresh developments on the fundamentals front, crude, by default, is under the influence of the gloomy attitude in the broader financial markets.” As investors prepared for the Fed’s announcement later in the day, stocks in Asia fell and bond yields increased on Wednesday.