October 4, 2023[Reuters]- Oil fell on Wednesday ahead of a panel meeting of OPEC+ ministers, as the market weighed expectations of supply tightness against fears that high interest rates could reduce fuel demand.
Brent crude oil futures dipped 18 cents, or 0.2%, to $90.74 a barrel by 0611 GMT, while U.S. West Texas Intermediate crude (WTI) fell 20 cents to $89.03 per barrel.
Data on Tuesday night showed that U.S. job openings increased by the largest amount in more than two years, prompting a further sharp rise in Treasury yields.
Oil benchmarks have also been pressured by concerns that the strengthening dollar would dent demand, as it makes oil more expensive for holders of other currencies.
“A resilient labour market is deemed to be providing more room for the Federal Reserve (Fed) to keep rates high for longer,” said Yeap Jun Rong, market analyst at IG.
The Organization of the Petroleum Exporting Countries and allies, or OPEC+, is expected to keep output policy unchanged when it meets on Wednesday, after members Saudi Arabia and Russia extended output cuts to the end of the year.
Saudi Arabia is expected to raise its November official selling price of Arab Light crude to Asia for a fifth straight month, according to a Reuters survey, as market participants expect supplies of medium sour crude to remain tight.
“The recent oil price reversal could be a reason for the cartel to keep their supply cuts unchanged in today’s review meeting,” ANZ Bank analysts Brian Martin and Daniel Hynes said in a note.
Meanwhile, talks to restart Iraqi oil exports via a crude oil pipeline that runs through Turkey are still ongoing, an Iraqi oil official told Reuters, one day after Turkey said operations would start again this week following a near six-month stoppage.
The Russian government is ready to partially lift its ban on diesel exports in coming days, the daily Russian newspaper Kommersant reported on Wednesday, citing unnamed sources.
Investors are also closely watching supply and demand in the United States. Industry data showed crude stocks fell by about 4.2 million barrels in the week ended Sept. 29, according to market sources citing American Petroleum Institute figures on Tuesday.
U.S. government data on stockpiles is due on Wednesday. Eight analysts polled by Reuters estimated on average that crude inventories fell by about 500,000 barrels in the week to Sept. 29.
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