Oil prices fell on Wednesday, as pledges by Saudi Arabia and Russia to continue crude output cuts to the end of 2023 were offset by demand fears stemming from macroeconomic headwinds.
Brent crude oil futures were down $1.58, or 1.74%, to $89.34 a barrel, while West Texas Intermediate crude (WTI) fell $1.60, or 1.79%, to $87.63 per barrel.
Oil prices remain under pressure from demand fears driven by macroeconomic headwinds.
The OPEC+ Joint Ministerial Monitoring Committee was set to meet on Wednesday. The OPEC+ group is expected to hold its current oil output in the meeting, sources told Reuters.
Saudi Arabia’s energy ministry confirmed on Wednesday it will continue its voluntary one-million-barrel-per-day (bpd) crude supply cut until the end of this year.
Russia said it will continue its current 300,000 bpd crude export cuts until the end of the year, and will review its voluntary 500,000 bpd output cut, set back in April, in November.
The current dollar strength is “a rally that will continue to haunt all markets including oil, even when, as is now, there is a compelling fundamental backdrop,” one analyst said.
As the trade currency of oil, a strong dollar makes oil comparatively expensive for holders of other currencies, which can dampen demand.
