Due to the increase in demand for oil, the price of oil in the world market increased. Brent crude oil price rose to $85 per barrel. West Texas Intermediate was at $90 per barrel
Oil prices rise on signs of OPEC production cut
Oil prices rose on signs from Saudi Arabia that OPEC may cut output, but trading was volatile as investors digested and ultimately economic distress from the head of the US Federal Reserve.
Brent crude futures were up $1.65 at $85 a barrel. US West Texas Intermediate (WTI) crude futures rose 54 cents to $90.06 a barrel. Both contracts rose throughout the session and fell to $1.
Overall, Brent gained 4.4% for the week, while WTI was set to gain 2.5%.
The UAE has become the latest member of OPEC+ to state that it is in line with Saudi Arabia’s thinking about crude markets.
Saudi Arabia’s production likely to decline
On Monday, Saudi Arabia dazzled the possibility of production cuts to offset the return of Iranian barrels to oil markets, if Tehran strikes a nuclear deal with the West.
Commerzbank said in a note that “the impression remains that Saudi Arabia is unwilling to tolerate any drop in prices below $90.
Oil prices fell briefly after Fed Chair Jerome Powell said tighter monetary policy to fight inflation could be “for a while,” meaning slower growth, a weaker job market and a lack of interest for households and businesses.
Effects of the increase in oil prices
Rising fuel prices mean higher costs for companies to run bus and taxi services. These costs are passed on to consumers.
The increase in oil prices affects everything from the cost of consumer products to the cost of logistics.
Inflation in 2022 is partly due to higher oil prices. The sharp rise in oil prices contributed to the high inflation rate.