Crude jumped more than 4 percent as traders assessed the prospects for OPEC production cuts

August 29: International crude oil futures rose more than 4% on Monday, extending last week's rally as traders assessed the positive support of a possible OPEC alliance production cut and the escalation of the civil conflict in Libya, offsetting the impact
of a strong dollar and future U.
S.
interest rate hikes that could curb economic growth.

By the close, the global benchmark October Brent crude was up $4.
10 or 4.
1 percent at $105.
09 a barrel
.
The contract rose 4.
4%
last week.

The October contract for West Texas Intermediate (WTI) on the New York Mercantile Exchange (NYMEX) rose $3.
95 or 4.
2 percent to $
97.
01.
The contract rose 2.
9%
last week.

A week ago, Saudi Arabia, OPEC's largest producer, raised the possibility of
a production cut.
OPEC sources said that if Iran reaches a nuclear deal with the West, OPEC production cuts may go hand in hand with Iran's resumption of crude oil exports
.

The OPEC alliance will hold a ministerial meeting on September 5 to discuss production policy
in October.

Analysts noted that oil prices have risen steadily since last week as markets expect OPEC and its allies to cut production in an effort to restore market balance
amid the prospect of reviving the Iran nuclear deal.

The head of the International Energy Agency (IEA), which advises developed countries, said on Monday that IEA members could release more stocks
from strategic crude oil reserves if deemed necessary.

The strength of the dollar on Monday constrained
the rise in oil prices.
Fed Chairman Jerome Powell said he would keep interest rates higher for longer to curb inflation, a hawkish speech that pushed the dollar to a 20-year high
on Monday.

However, analysts at CMC Markets said that while a strong dollar is generally weighing on commodity markets, the lack of crude oil supply may continue to support oil prices to the upside
.

Unrest and 32 deaths in the capital of OPEC member Libya over the weekend have raised concerns that the country could descend into a full-blown conflict, leading to another disruption
in crude production and exports.

The American Petroleum Institute will release its inventory report on Tuesday, and analysts expect U.
S.
crude inventories could fall by 600,000 barrels last week, as well as distillate
and gasoline inventories.

U.
S.
Strategic Reserve crude inventories fell by 3.
1 million barrels in the week ending Aug.
26, falling to their lowest level
since December 1984, according to the U.
S.
Department of Energy.

From the perspective of fund dynamics, the position data of the US Commodity Futures Trading Commission (CFTC) shows that the fund increased its net long position in crude oil last week, which is also the first increase in holdings in
five weeks.
As of August 23, 2022, speculative funds held net long positions of 183,431 contracts in the WTI crude oil futures and options market in New York, an increase of 30,028 contracts
from a week ago.
Reduced holdings by 13,379 contracts
last week.

WTI crude is down 1.
63% so far this month, up 28.
99% year-to-date, and closed up 40.
17%
year-on-year on Monday.
Brent crude is down 4.
47% so far this month, up 35.
11% year-to-date, and closed up 43.
15%
year-on-year on Monday.
In 2021, WTI crude rose 55.
5%, the biggest annual increase since 2009
.
Brent crude rose 50.
5 percent, its biggest gain since 2016, largely due to strong demand and limited
supply growth.