Brent Steady Near $92
A growing supply glut coupled with a strong U.S. dollar kept Brent crude oil prices low on Monday. The commodity traded at $92.28 at 7:30 GMT after losing about 5 percent last week.
The U.S. economy has been on the mend this year and the dollar has strengthened considerably, hurting commodities priced in dollars. On Friday, the greenback reached a four-year high following the release of upbeat employment data. A non-farm payrolls report showed that U.S. employers added 248,000 new jobs in September and the unemployment rate fell to 5.9 percent, its lowest level since July 2008.
Crude prices have been unresponsive to new developments in the growing conflict in the Middle East, but as the situation escalates the risk of a supply interruption increases. Over the weekend, Islamic Militants continued on with their offensive throughout Iraq and Syria despite U.S.-led airstrikes targeting their infrastructure.
Moving forward, investors will be keeping a close eye on OPEC as some of the organization’s members will likely begin to push for a supply cut in order to bring prices back above $100, as that is the price needed in order to balance their budgets. However, the group is not set to meet until November and is not expected to call an emergency meeting any earlier. CNBC reported that most see OPEC as optimistic about the demand for oil as the fourth quarter approaches. Several of the group’s members have said they don’t think the recent drop in prices warrants a supply cut as demand will likely increase moving into the winter.
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