© Reuters. FILE PHOTO: The China National Petroleum Corporation (CNPC) Dalian Petrochemical Corp refinery is seen near downtown Dalian, in Liaoning province, China, July 17, 2018. Picture taken July 17, 2018. REUTERS/Chen Aizhu/Archive Photo

By Muyu Xu

(Reuters) – Oil prices faced a second week of declines, although they rose on Friday as the dollar strengthened ahead of a speech by Federal Reserve Chair Jerome Powell amid tight supply concerns eased.

The price rose 39 cents, or 0.5%, to $83.75 a barrel by 0624 GMT, while U.S. West Texas Intermediate crude was also up 39 cents, or 0.5%, to $79.44 a barrel.

For the week, crude oil prices are expected to fall between 1.2% and 2.2% for a second straight week of decline.

“There is no doubt that the Fed’s monetary policy outlook will be the key driver for future markets,” said Yeap Jun Rong, market analyst at IG.

“With fresh updates to US inflation and jobs data following the last FOMC meeting, the focus will be on the factors that the Fed chair will focus his attention on,” he said.

Investor caution over Powell’s remarks at the Jackson Hole Symposium pushed the safe-haven dollar to a 10-week high, its biggest rise in a month, as markets waited for news of how long interest rates would stay elevated.

A strong dollar makes oil more expensive for holders of other currencies and dampens demand.

On the supply side, talks between Turkey and Iraq’s semi-autonomous Kurdistan Regional Government over northern Iraq’s exports are still ongoing after officials failed to reach an agreement to resume oil exports earlier this week.

Turkey halted Iraqi oil supplies through the port of Ceyhan on March 25 after losing a long-running arbitration case by Iraq.

The market is closely watching Iranian oil flows as the country’s crude oil production is set to hit 3.4 million bpd by the end of September, Iran’s oil minister was quoted as saying by state media, although US sanctions remain in place.

Market sentiment is being weighed even further as US officials are preparing a proposal that would ease sanctions on Venezuela’s oil sector and allow more companies and countries to import its crude.

Norway’s Equinor announced on Friday that it has started production at its expanded Statfjord East field six months ahead of schedule and expects production to increase by 26 million barrels of oil equivalent.

“Oil price support from previous production cuts has faded. The market expects Saudi Arabia to continue its voluntary production cuts,” analysts at Haitong Futures said.

Analysts expect the top oil exporter is likely to extend its voluntary 1 million barrels-a-day oil cut into October for a third straight month as supply is uncertain and the kingdom looks to further draw down global inventories.

Source : www.investing.com

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