(RTTNews) – Crude oil rose modestly on Friday due to a US push to encourage conventional energy over renewables, as well as weakness in the US dollar despite reports of oversupply and low demand.
WTI crude oil for December delivery was last seen trading up $0.38 (or 0.64%) at $59.81 a barrel.
The government shutdown in the US has entered its 38th day.
Concerns have grown about weakness in the US economy, with job cuts increasing in the private sector and federal employees furloughing.
The US Dollar Index was last seen trading down 0.16 (or 0.16%) today at 99.53.
A weak dollar favors goods priced in US dollars, as it makes them cheaper for international buyers.
The US Federal Reserve is set to announce its next monetary policy decision after its December 9-10 meeting. The latest private jobs data shows an increase in layoffs, with investors expecting another rate cut by the Fed. Rate cut may impact the US dollar.
In a significant development at an energy conference in Athens, Greece, US officials said the world should focus on reliable fossil fuel supplies instead of renewable energy, which they claim is not profitable for investment. The US administration wants to replace Russia as an oil and energy supplier to Western Europe. The US produces more than 20 million barrels of oil and liquids per day (one in five barrels in the world).
On Sunday, OPEC+ announced a supply increase of 137,000 barrels per day for December, but said it planned to hold off on any further increases until the first quarter of 2026.
The Organization of the Petroleum Exporting Countries pumped 28.43 million barrels per day in October, up 30,000 bpd from September’s total, with Saudi Arabia and Iraq accounting for the biggest increases, according to a survey released by Reuters on Tuesday.
Traders are also worried about reports of record amounts of crude going into floating storage. This is partly driven by anti-Russian sanctions targeting tankers as well as additional Middle East cargo.
On Wednesday, the US Energy Information Administration (EIA) reported that US commercial crude oil stockpiles increased by 1.3% for the week ending October 31. It further said that stockpiles increased by about 5.2 million barrels to 421.2 million barrels, while the market had predicted a decrease of 2.4 million barrels.
The US has imposed sanctions on Russia’s two largest oil producers, Rosneft and Lukoil. Both corporations contribute about 50% of total Russian oil production. As a result, organizations have cut their oil purchases, indicating disruption in Russian oil supplies.
Demand concerns have forced Saudi Arabia, the world’s biggest oil exporter, to lower crude oil prices in December to cater to Asian buyers.
However, weakness in the greenback and aggressive US measures to boost fossil fuels supported crude oil prices today.
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