Oil stabilizes with support from supply concerns

Oil prices moved in a narrow range on Thursday, after two days of a sharp decline on Wednesday, as a downgrade in the credit rating of the United States affected sentiment, but fears of a shortage of supply provided some support.

Fitch downgraded the credit rating of the United States, the world’s largest oil consumer, reflecting expectations of financial deterioration, political polarization and the global situation of the dollar.

Despite the broader decline in sentiment, oil prices received some support on concerns of supply shortages due to production cuts by major producers which are expected to be extended at a scheduled meeting on Friday.

Brent crude futures rose four cents to $83.24 a barrel by 0422 GMT, while US West Texas Intermediate crude rose 0.1% to $79.53 a barrel.

Both benchmarks traded near their highest since April on Wednesday, but settled down 2 percent after the U.S. credit rating downgrade. WTI prices rose about 16 percent in July, while Brent crude rose more than 14 percent.

The next meeting of the Joint Ministerial Monitoring Committee of the OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and other allies, is scheduled to take place on Friday.

Reuters reports indicate that it is unlikely that the OPEC + alliance will amend current production policies, as Saudi Arabia is expected to extend the voluntary cut by one million barrels per day for another month, to include September.