Oil prices remain stable as the US price falls; downturn fears weigh
Oil prices held steady in early Asian trade on Tuesday, helped by a weaker US dollar, though rising shale production and concerns that stubbornly high inflation could push the world economy into recession limited gains.
Brent crude futures were up 9 cents, or 0.1%, to $91.71 per barrel by 1:20 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 6 cents, or 0.1%, to $85.52 per barrel.
The dollar fell against a basket of major currencies after Britain's new finance minister, Jeremy Hunt, junked a large portion of the government's so-called "mini-budget," which raised risk appetite.
The dollar index fell 0.82% to 112.11 against a basket of currencies. A weaker dollar lowers the price of oil for non-US consumer buyers. Rising shale output has helped to ease an oil shortfall while reducing price gains.
The Permian Basin of Texas and New Mexico, the biggest shale oil basin in the United States, is expected to grow by 50,000 barrels per day (BPD) this month to a record 5.453 million BPD, according to the Energy Information Administration.
Expectations that China will maintain its loose monetary policy to help its economy, which has been hampered by COVID-19 restrictions, also have boosted oil prices.
Meanwhile, OPEC+ members have been lining up to support the sharp reduction in output agreed this month, despite the White House accusing Riyadh of coercing some other countries into supporting the move.
On the supply side, crude oil stocks in the United States were expected to rise for the second week in a row, rising by 1.6 million barrels in the week ending Oct. 14, according to a preliminary Reuters poll released on Monday.
The Permian Basin of Texas and New Mexico, the largest shale oil basin in the United States, is expected to increase by about 50,000 barrels per day (BPD) this month to a record 5.453 million BPD, according to the Energy Information Administration.