Futures Movers: Oil prices rise ahead of Jerome Powell speech but set for weekly losses

Posted By: EN Todayon: August 25, 2023In: General Energy News, Oil & Gas News

Oil futures rose Friday ahead of an eagerly awaited speech by Federal Reserve Chair Jerome Powell, but crude remains on track for a second straight weekly loss.

Price action

West Texas Intermediate crude for October delivery
CL00,
+1.37%

CL.1,
+1.37%

CLV23,
+1.37%
rose 84 cents, or 1.1%, to $79.89 a barrel on the New York Mercantile Exchange.
October Brent crude
BRNV23,
+1.33%,
the global benchmark, was up 85 cents, or 1%, at $84.21 a barrel on ICE Futures Europe. November Brent
BRN00,
+1.24%

BRNX23,
+1.24%,
the most actively traded contract, was up 81 cents, or 1%, at $83.73 a barrel.
Back on Nymex, September gasoline
RBU23,
+0.44%
rose 0.3% to $2.588 a gallon, while September heating oil
HOU23,
+1.52%
was up 1.4% at $3.17 a gallon.
September natural gas
NGU23,
-0.36%
gained 03% to $2.526 per million British thermal units.

Market drivers

Powell is scheduled to speak Friday morning at the Kansas City Fed’s annual monetary policy symposium. Investors will be eager for clues to the Fed’s rate path.

Powell’s remarks could influence overall investor sentiment, while oil traders will remain sensitive to moves by the U.S. dollar. The currency rose to a 10-week high Thursday, while the ICE U.S. Dollar Index
DXY
was steady Friday. A stronger dollar makes oil more expensive to users of other commodities.

After a July rally, crude prices have pulled back in August, with the retreat tied in part to concerns over demand out of China, the world’s second-largest oil consumer. Crude has been boosted in part by supply cuts, including Saudi Arabia’s 1 million barrel-a-day reduction that began in July and is set to run at least through September.

Prospects of added supply from elsewhere, however, have contributed to the weaker tone in August.

“Hopes are pinned on Venezuela, Iran and Iraq,” Barbara Lambrecht, commodity strategist at Commerzbank, said in a note.

U.S. officials were drafting a proposal that would ease sanctions on Venezuela’s oil exports if the country moves toward a free and fair presidential election, Reuters reported Wednesday afternoon.

Daily production in Iran has already increased by 350,000 barrels since the spring, Lambrecht noted, with exports recently exceeding 2 million barrels per day.

If survey-based production estimates news services, which are due to be published from the end of next week, confirm that the increased production trend has continued in August, prices are likely to fall further, even if OPEC supply remains at a low level due to Saudi Arabia’s massive production cut, she wrote.