Oil rebounds over supply side concerns ahead of OPEC meeting

By Sibel Morrow

ANKARA (AA) - Oil prices rebounded on Tuesday, after losing almost 4% in the previous trade, as fresh supply-side uncertainties coupled with anticipated supply cuts by OPEC producers overshadowed a strong dollar, which discourages investors from buying dollar-indexed oil.

International benchmark Brent crude traded at $84.19 per barrel at 09.42 a.m. local time (0642 GMT) for a 1.6% increase from the closing price of $82.86 a barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI), trading at $77.94 per barrel at the same time, increased 1.6% after the previous session closed at $76.71 a barrel.

Monday marked the second consecutive trading day during which both benchmarks plummeted to 9-month lows over demand concerns arising from fears of a global economic recession and the rising value of the US dollar.

Recession fears were further fueled as central banks of most major economies are taking a strict stance against rising inflation by increasing their interest rates. The US, the UK, Norway, Switzerland, Taiwan, South Africa, Indonesia, and the Philippines all increased interest rates.

Accelerating the decline in prices, the dollar index rose to 113.31, hovering around 20-year highs.

Supply-side uncertainties, however, continue to impact price fluctuations as rising aggression in the Russia-Ukraine war is bringing new EU sanctions on the table and increasing the likelihood of supply disruptions.

Investors are eyeing the meeting of the OPEC+ producers on Oct. 5 when they will decide on their November output. The group had agreed to reduce production in October by 100,000 barrels per day (bpd).