Oil rises as focus shifts to potential supply cuts

Oil prices rose more than 1 percent on Tuesday, after plunging to a nine-month low the previous day, amid signs that the OPEC+ alliance may begin to cut production to avoid a further price collapse.

US NYMEX crude rose to levels near $78 a barrel during these moments of trading today after falling earlier to levels below $77, an increase of 1.5 percent, or the equivalent of $1.2 a barrel.

And Brent crude, the benchmark, increased during these moments of trading, today, Tuesday, by more than 1.4 percent, reaching levels of $ 84.2, after falling earlier to below $ 83 a barrel.

On Tuesday, the dollar fell from its highest level in 20 years, which it touched on Monday, adding some reassurance to the oil market.

In the previous two trading sessions, Brent crude fell 7.1%. In contrast, WTI fell 8.1%, under pressure from a stronger dollar, which makes US dollar-denominated crude oil more expensive for buyers of other currency holders, as well as growing fears that higher interest rates will lead to a recession from It would reduce the demand for fuel.

Reacting to the recent declines, officials from major producers have hinted that measures could be taken to keep prices stable.

Iraqi Oil Minister Ihsan Abdul-Jabbar said on Monday that the OPEC+ alliance was monitoring the situation in the crude markets and that he wanted to maintain balance in the markets.

Analysts said that additional selling in the oil markets could lead to the intervention of OPEC + to support prices by collectively reducing its production.

The OPEC+ group boosted production this year after record cuts in 2020 due to the collapse in demand caused by the outbreak of the Covid-19 pandemic. However, in recent months the conglomerate has failed to deliver on planned production increases, which could undermine the effectiveness of any announced supply cuts.