Oil Rises On Friday But Tumbles On Week As Dollar Hits 5-Week High

NEW YORK (UrduPoint News / Sputnik - 20th August, 2022) Oil prices rose on Friday but still ended the week lower after giving back much of the day's gains as the dollar hit a five-week high, weighing on commodities priced in the US Currency that included crude.

West Texas Intermediate (WTI), the benchmark for US crude, went up all the way up to $92 per barrel on Friday before giving back most of it to settle at $90.88, up 27 cents, or 0.3% on the day. The session high for WTI was $92.08.� For the week, the US crude benchmark ended down 1.3%.

Brent, the London-traded global benchmark for crude, settled up 13 cents, or 0.1%, at $96.72. Brent's session high was $97.84. For the week, Brent finished down 1.5%.

The Dollar Index, measured against six major currencies, hit a five-week high of 108.14. The US currency rallied on speculation that the Federal Reserve would not ease up on super-sized interest rate hikes until it gets a better handle on inflation. Such a notion has gained ground since Wednesday's publication of the Fed's meeting minutes for July, which did not give a clear indication on what the upcoming US rate hike for Sept. 21 would be.

"You know that when the oil market starts talking about the benefits of Fed moves versus the maneuvers of OPEC or EIA data, then it's time to wonder how much of the fundamentals are holding up the market," John Kilduff, partner at New York energy hedge fund Again Capital, said.

"For what it's worth, $90 WTI is acting like the new $100."

In Thursday's session, both WTI and Brent rose almost 4% after OPEC Secretary-General Haitham Al Ghais hinted at a production cut by the cartel in September amid the prospect that Iran's 2015 nuclear deal could be revived in a matter of weeks.

Earlier in the week, WTI fell to $85.73, its lowest since Jan. 26, while Brent sank to� $91.72, its lowest since February 16, on speculation of a new lease of life for the Iran nuclear deal, which could bring an additional one million barrels per day or more to the market. Oil was also weighed down since last week by data showing oil refining volumes by top importer China having hit pandemic-era lows.

Al Ghais' hint of an OPEC production, however, boosted risk-taking in oil again.

With 13 original members led by Saudi Arabia - before its alliance with Russia and nine other oil producers - the extended OPEC+ group has been raising production over the past year since slashing them from May 2020 in the aftermath of the coronavirus breakout that decimated demand for oil.

While this year's production hikes were initially insulated by the Ukraine conflict that sent crude to 14-year highs of between $130 and $140 a barrel by early March, OPEC+ has become more vulnerable of late as a market downturn since May has persistently driven prices lower.