On Friday, oil prices spiked by as much as $1 on the back of rising optimism about future fuel demand. However, the market was unable to push prices higher because investors were waiting for a speech by the US Federal Reserve chairman to get hints about the timing and magnitude of interest rate hikes.
At 4:10 AM GMT, Brent crude futures had risen 87 cents, or 0.9%, to $100.21 a barrel. In addition, US West Texas Intermediate (WTI) oil futures gained 88 cents, or 0.9 percent, to $93.40 per barrel. After falling by around $2 on Thursday, both contracts rose by as much as $1 during early trading.
The benchmark oil contracts are expected to rise by roughly 3 percent this week, despite concerns about the destruction of oil demand that have subsided despite uncertainties over the pace of rate hikes in the United States to combat growing inflation.
According to ANZ Research, the economic outlook has been clouded by statements made by several US central bank officials in advance of Chairman Jerome Powell’s address on Friday. Despite this, “signs of strong demand are emerging,” ANZ Research analysts wrote in a note, citing promising figures on the expansion of road traffic.
TomTom’s latest Congestion Index data shows that on August 18-24, traffic volumes increased significantly across the Asia Pacific, Europe, and North American regions. According to ANZ, using statistics from Baidu, congestion in China has also improved. The possibility that Opec will reduce output to counteract Iran’s rising output also bolstered prices.
According to Reuters sources, if Iran secures a nuclear deal with the West, its return to the oil markets will likely coincide with prospective Opec+ production cuts mentioned this week by Saudi Arabia. O
As the supply cartel has said it will decrease output if oil prices decline, crude markets may remain supported, according to CMC Markets analyst Tina Teng.
The European Union has made a final offer to resurrect the nuclear deal, and Tehran is currently reviewing the response from the United States. The speed with which Iran could begin oil shipments when an agreement is reached is, however, unknown.
It may take Iran around a Year and a half to reach its full capacity of four million barrels per day if sanctions are repealed, an increase of 1.4 million BPD
