Oil price tops $98 a barrel — first time in two months

Oil prices edged higher on Friday as the dollar eased and supply risks lingered.

Brent crude climbed 4.02 percent  to $98.45 a barrel — first time since August 30. 

US West Texas Intermediate (WTI) crude rose 4.08 percent to $92.24.

According to Reuters, the upward movement in price comes as the dollar slipped.

A weaker dollar boosts oil demand as it makes the commodity cheaper for those holding other currencies.

While demand concerns weighed on the market, supply is still expected to be tight, with Europe’s upcoming embargoes on Russian oil and a slide in US crude stockpiles, Reuters said.

“The increasingly gloomy macro outlook is providing some strong headwinds to the oil market and without the supply cuts announced by OPEC+ back in October, we would likely have been trading at much lower levels,” Warren Patterson, ING’s head of commodities strategy, said.

He said the OPEC+ cuts have provided some stability to the market in the short term.

However, Patterson said this is likely to change once the European Union’s (EU) ban on Russian oil comes into force next month for crude and in February 2023, for refined products.

Meanwhile, fears of a recession in the United States grew on Thursday after Jerome Powell, Federal Reserve chairman, said it was “very premature” to be thinking about pausing interest rate hikes.

The Bank of England also warned that Britain would experience its longest recession and the economy might not grow for another two years.

Meanwhile, in Nigeria, oil output has declined steadily in recent months, falling below the one-million-a-barrel mark.

This is even as crude oil theft and vandalism have reached unprecedented levels, triggering shut-ins of oil export terminals.

The federal government said it has developed a framework for the concessioning of oil and gas pipeline assets to curb vandalism.

“There are some challenges. We’ve been talking about vandalism. But if the private sector comes in, perhaps they will be able to safeguard their own pipelines more than the government is doing on its own,” it said.