Oil rose this week with Saudi Arabia’s warning that supply cuts may be warranted overshadowing multiple bearish developments.

West Texas Intermediate futures settled at US$93.06 a barrel on Friday for a 2.5 per cent weekly gain. Prices have been buoyed since the Saudi oil minister said the OPEC+ alliance may limit production to stabilize a volatile market. Meanwhile, the US central bank probably will continue raising interest rates to combat inflation, Federal Reserve Chair Jerome Powell signaled. Higher rates are typically seen as damaging to energy demand.

“Powell reminded Wall Street that restrictive policy is required but we are not there yet, so recession fears and a deteriorating crude demand outlook is not warranted yet,” said Ed Moya, senior market analyst at Oanda.

Oil has lost almost a quarter of its value since June on escalating concerns over a global economic slowdown, but seems to have found a floor around US$90 a barrel this month. The prospect of a revived nuclear deal with Iran, which could lead to a surge in crude exports, has added to bearish sentiment recently.

With inflation still rampant, Fed officials revived concerns Friday that they would take continue to move aggressively to slow the economy.

“Restoring price stability will likely require maintaining a restrictive policy stance for some time,” Powell said in remarks prepared for a policy forum in Jackson Hole, Wyoming. “The historical record cautions strongly against prematurely loosening policy.”

Prices:

• WTI for October delivery fell rose 54 cents to settle at US$93.06 in New York
• Brent for October settlement rose US$1.65 to US$100.99