Brent futures perched above $100/bbl amid lingering concerns over tighter supply

Front-month ICE Brent has seen muted gains of $0.18/bbl in the past day, trading at $101.74/bbl at 09.00 GMT.

PHOTO: De facto OPEC leader Saudi Arabia has said output could be cut to rebalance the market, ahead of the next OPEC+ meeting on 5 September. Getty Images

Upward pressure:

Fears of tighter supply still linger ahead of the OPEC+ meeting on 5 September, following Saudi Arabia’s hint at a possible OPEC+ output cuts to support crude prices in a “schizophrenic” market.

Meanwhile, Algerian energy minister Mohamed Arkab believes that the recent weeks’ oil price volatility has been driven by concerns over an economic slowdown rather than oil market fundamentals.

The US Energy Information Administration (EIA) reported a crude oil inventory decline of 3.3 million bbls in the week to 19 August, much bigger than the draw of 933,000 bbls expected by analysts polled by Reuters.

An electrical fire forced BP to shut down some units its Whiting refinery in Indiana, US. The fire has been extinguished and BP is determining when the affected units can be restarted.

Downward pressure:

Iran and the United States have inched closer to an agreement. Iran has received Washington's response to a final EU draft agreement for saving Tehran's 2015 nuclear deal with major powers, according to Iran’s foreign ministry.

The US Federal Reserve’s hawkish stance and anticipation of a 50- to 70-basis point rate hike could weigh on the crude prices. In the wake of Fed Chair Jerome Powell's recent remarks regarding "feasible but challenging soft landings for the US economy", all eyes are on the Fed's annual conference in Jackson Hole, Wyoming, starting today.

The Bank of America forecasts a 50-basis point interest rate hike in the US in September and November, followed by a 25-basis point hike in December.

By Konica Bhatt

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