# Oil rises on prospect of OPEC+ supply cut
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-29
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Oil Prices Surge on OPEC Talks & Conflict in Libya
Meta Description: Analysts expect oil market balancing act as OPEC+ mulls production cuts and Iran nuclear deal impact, despite U.S. growth concerns and strong dollar.
URL: https://financedigest.com/oil-rises-on-prospect-of-opec-supply-cuthtml

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By Alex Lawler

LONDON (Reuters) -Oil rose more than 1% on Monday, extending last week’s gain, as potential OPEC+ output cuts and conflict in Libya helped to offset a strong U.S. [dollar and a dire outlook](https://www.financedigest.com/dollar-firms-in-soft-holiday-trading-outlook-bullish.html "Dollar firms in soft holiday trading, outlook bullish") for U.S. growth.

Saudi Arabia, top producer in the Organization of the Petroleum Exporting Countries (OPEC), last [week raised the possibility of production cuts](https://www.financedigest.com/meta-plans-to-cut-thousands-of-jobs-as-soon-as-this-week-bloomberg-news.html "Meta plans to cut thousands of jobs as soon as this week – Bloomberg News"), which sources said could coincide with a boost in supply from Iran should it clinch a nuclear deal with the West.

Brent crude was up $1.14, or 1.1%, at $102.13 a barrel by 1332 GMT, having risen by 4.4% last week. U.S. West Texas Intermediate (WTI) crude gained $1.52, or 1.6%, to$94.58 after rallying 2.5% last week.

Oil [prices are inching higher on hopes of a production cut](https://www.financedigest.com/tesla-expands-discounts-with-price-cuts-in-europe-singapore-israel.html "Tesla expands discounts with price cuts in Europe, Singapore, Israel") from OPEC and its allies to restore market balance in response to the revival of Iran’s nuclear deal,” said Sugandha Sachdeva, vice president of commodity research at Religare Broking.

OPEC+, comprising OPEC, [Russia and allied](https://www.financedigest.com/u-s-allies-slam-russia-at-u-n-over-its-seizure-of-ukraine-nuclear-plant.html "U.S., allies slam Russia at U.N. over its seizure of Ukraine nuclear plant") producers, meets to set policy on Sept. 5.

The price of [crude oil](https://www.financedigest.com/oil-dips-after-fed-comments-us-crude-stock-build.html "Oil dips after Fed comments, US crude stock build") has surged this year, with Brent coming close to a record high of $147 in March as Russia’s invasion of Ukraine exacerbated supply concerns. [Rising fears over high interest rates](https://www.financedigest.com/uk-inflation-rate-unexpectedly-rises-to-10-4-in-february.html "UK inflation rate unexpectedly rises to 10.4% in February"), inflation and recession risks have since weighed on the market.

[Oil’s gain](https://www.financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-high.html "Oil gains after IEA sees demand rising to record high") was limited by a strong U.S. dollar, which hit a 20-year high on Monday after the Federal Reserve chairman signalled that interest [rates would be kept higher for longer to curb inflation](https://www.financedigest.com/german-inflation-rate-to-ease-over-course-of-2023-econ-minister.html "German inflation rate to ease over course of 2023 – econ minister"). \[USD/\]

While a strong dollar restrains broad commodity prices, the undersupply issue in the oil markets will probably [continue to support](https://www.financedigest.com/adnami-appoints-burnett-and-bukholt-to-support-continued-expansion.html "Adnami appoints Burnett and Bukholt to support continued expansion") the upside bias,” said CMC Markets analyst Tina Teng.

Unrest in Libya’s capital at the weekend, resulting in 32 deaths, sparked [concern that the country could slide into a full-blown conflict and disrupt in oil](https://www.financedigest.com/oil-near-flat-as-us-crude-stock-draw-contends-with-economic-concerns.html "Oil near flat as US crude stock draw contends with economic concerns") supply from the OPEC nation.

(Reporting by Alex LawlerAdditional reporting by Mohi Narayan in New Delhi and Sonali Paul in MelbourneEditing by David Goodman, Kirsten Donovan)


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