Oil Prices Stable as Soaring Dollar Offset by US Output Outages

Oil Prices Stable as Soaring Dollar Offset by US Output Outages
An oil pump of IPC Petroleum France is seen at sunset outside Soudron, near Reims, France, on Aug. 24, 2022. (Pascal Rossignol/Reuters)

LONDON—Oil prices were broadly stable on Wednesday as pressure from a strengthening dollar and crude storage builds was offset by U.S. production cuts caused by Hurricane Ian.

Brent crude futures were up 5 cents, or 0.06 percent, at $86.32 per barrel by 0937 GMT, while U.S. West Texas Intermediate (WTI) crude futures were down 9 cents, or 0.1 percent, at $78.41 per barrel. Both contracts erased earlier falls after rising over 2 percent in the previous session.

In the Gulf of Mexico, about 190,000 barrels per day of oil production, or 11 percent of the Gulf's total, were shut-in due to Hurricane Ian, according to offshore regulator the Bureau of Safety and Environmental Enforcement (BSEE).

But the dollar hit a fresh two-decade peak against a basket of currencies on Wednesday as rising global interest rates fed recession concerns. A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies.

Goldman Sachs cut its 2023 oil price forecast on Tuesday, due to expectations of weaker demand and a stronger U.S. dollar, but said global supply disappointments only reinforced its long-term bullish outlook.

By Shadia Nasralla
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