Oil maintained gains from the previous session on Tuesday morning in Asia trading after the Organization of Petroleum Exporting Countries and allies including Russia (OPEC+) decided on a modest 100,000 barrel-a-day supply cut while adding that the group may do more in the fourth quarter if necessary.
Nuclear Deal: Gains made by crude oil on Monday were supported by a setback in Iranian nuclear talks, reported Bloomberg. The European Union’s ace diplomat, Josep Borrell, played down the possibility of a rapid revival of the deal, subduing the prospects for a swift return of Iranian supply, it said.
Price Action: West Texas Intermediate (WTI) futures were trading at $89.23/barrel on Tuesday, up from the lows of $86.82/barrel seen on Friday. Crude prices had fallen recently dragged by demand concerns over fears of a recession and aggressive central bank rate hikes to rein in inflation.
The United States Brent Oil Fund BNO closed 1.03% higher while the Vanguard Energy Index Fund ETF VDE traded over 2% higher.
OPEC statement: A statement released by OPEC read, “the meeting noted that higher volatility and increased uncertainties require the continuous assessment of market conditions and a readiness to make immediate adjustments to production in different forms if needed.”
“OPEC+ has the commitment, the flexibility, and the means within the existing mechanisms of the Declaration of Cooperation to deal with these challenges and provide guidance to the market."
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