Oil prices experienced a notable rebound after a week of volatility, although they remain limited by a strong dollar and uncertainty surrounding US crude and fuel demand.
New York-traded West Texas Intermediate (WTI) crude for November delivery settled at $90.39 per barrel, marking an 0.8% increase.
London-traded Brent for November delivery settled at $93.96 per barrel, down 0.72%.
WTI had hit a 10-month high of $93.74 on September 19, gaining around 30% since the end of May. Brent also reached a 10-month high of $95.96 on the same day with a similar gain.
The Dollar Index reached its highest point since November, discouraging purchases of dollar-denominated commodities, including crude. The dollar’s strength is a result of the Federal Reserve’s recent projection of another interest rate increase by year-end.
Investors are concerned about the economy’s ability to sustain current interest rate levels, given the recent surge in oil prices and inflation driven by energy costs.
The oil market is also keeping an eye on US weekly oil inventory data from the American Petroleum Institute (API), which serves as a precursor to official inventory data from the US Energy Information Administration (EIA). Analysts expect a crude stockpile drop, a slide in gasoline inventories, and a decrease in distillate stockpiles.
Overall, while oil prices have rallied due to supply restrictions, concerns about the economy and the dollar’s strength continue to affect the market’s dynamics.
