Small fluctuations in oil prices

Oil was flat after an industry report signaled a fresh rise in crude inventories, bolstering prospects for a supply tightening as Saudi Arabia hinted at possible output cuts.

West Texas Intermediate settled near $93 a barrel after rising nearly 4% in the previous session. According to sources familiar with the data, American Petroleum Institute crude inventories fell by 5.63 million barrels last week.

The oil market seems to be “holding up” despite the abundance of negative data. Economic activity has weakened from the US to Europe and Asia, fueling concerns that rising prices and the war in Ukraine will push the global economy into recession.

The possible revival of the nuclear deal with Iran, which could lead to an increase in exports from the country, has also weighed on the market recently.

A senior Republican demanded that Congress be given a chance to review any deal as Tehran and Western powers move toward a deal.

“The possibility of an OPEC+ production cut hinted at by Saudi Arabia this week was a catalyst for buyers,” an IG Asia analyst said.

However, the prospect of a revival of the Iran deal could lead to a knee-jerk reaction in oil prices to the downside.

Oil has lost a quarter of its value since early June on fears of an economic slowdown.

Saudi Arabia’s oil minister, Abdulaziz bin Salman, stressed this week that the derivatives market is increasingly disconnected from fundamentals and the OPEC+ alliance may be forced to cut output.

WTI for October delivery was down 0.3% at $93.45 a barrel while Brent for October delivery was down 0.5% at $99.76 a barrel.

The Energy Information Administration will release official data on US demand and inventories later today, and has already reported that fuel and supplies inventories in Oklahoma (a key storage hub) rose.