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Oil prices fell in early trade on Tuesday, following a three-week low in the previous session. Brent futures fell 30 cents to $90.41 a barrel, while U.S. West Texas Intermediate crude (WTI) fell 18 cents to $88.64 per barrel. Rising US yields and a stronger US dollar dominated market sentiment, leading to a drop in Brent crude oil prices to around $90 a barrel. Higher interest rates and a stronger dollar make oil more expensive for other currency holders, potentially dampening oil demand.
Turkey’s energy minister’s announcement that the country will restart operations on a pipeline from Iraq further impacted prices. Under the OPEC+ deal, production outside the GCC should remain flat over Q4. However, Iraq’s compliance has been spotty in the past, and export levels are expected to rise assuming the pipeline resumes operations. OPEC+ is expected to keep its output settings unchanged when it meets on Wednesday, keeping supplies tight.
Another factor affecting oil prices is Saudi Arabia’s likely increase in its November official selling price of Arab Light crude to Asia for the fifth straight month.