Oil Mixed As Traders Focus Concerns On Idalia As Well As Demand

Meanwhile, the U.S. attempts to speed along reconciliation with Kurdistan: File Image/Pixabay

Oil trading was mixed on Monday, the result of ongoing demand concerns mitigated somewhat by events such as a tropical storm off the U.S. Gulf Coast having the potential to disrupt supplies.

Tropical Storm Idalia was expected to intensify into a major hurricane, and observers worried it could damage Gulf Coast crude production, having already caused a day or so of power outages.

But traders on Monday were still reeling from remarks made prior to the weekend by Jerome Powell, chair of the U.S. Federal Reserve, who admitted his bank may have to raise interest rates yet again in an attempt to combat stubborn inflation.

Dennis Kissler, senior vice president of trading at BOK Financial, said, “There are concerns still about demand going to lighten especially if we see another click higher in interest rates; the market is very nervous.”

Brent settled down 6 cents at $84.42 per barrel, while West Texas Intermediate settled up 27 cents at $80.10.

Contributing to the bearish sentiment on Monday was the ongoing talks between the U.S. and Venezuela, which has sparked concern that if successful, both nations could wind up boosting crude exports; for the record, a White House National Security Council spokesperson said, "Should Venezuela take concrete actions toward restoring democracy, leading to free and fair elections, we are prepared to provide corresponding sanctions relief."

In other oil related news on Monday, Mark Stroh, the U.S. Consul General, met with Kurdistan’s electricity minister and expressed hopes that the federal government of Iraq and the semi-autonomous region of Kurdistan would work together and ratify a new hydrocarbon law; the overall goal is to help resume crude oil exports that were halted in March after the International Chamber of Commerce ruled in favour of Iraq against Turkey in a dispute over crude flows from Kurdistan.

Stroh earlier met with the Kurdistan Regional Government’s prime minister in the spirit of “deepening cooperation and fostering strong bilateral ties with the Kurdistan Region,” according to the KRG; Stroh called Kurdistan’s oil and gas industry “an important source of supply.”