Oil price on the rise – Commerzbank

Oil prices rose more than 2 percent on Friday, significantly capping previous weekly losses, Commerzbank commodity strategist Carsten Fritsch notes.

October’s OPEC+ production hike is still on the table

“The rally was linked to comments by Fed Chairman Jerome Powell, who opened the door to a rate cut by the Fed in September, in his Jackson Hole speech. This boosted sentiment in financial markets, which also affected the oil market. Oil prices rose at the start of the new trading week as Israel and the Hezbollah militia exchanged fire over the weekend. This increases the risk that the conflict could escalate and affect oil supplies.”

“However, the situation appears to have calmed down, which is why gains were initially limited. This only changed with the news that there was a risk of production losses in Libya. Brent then climbed back above the $80 per barrel mark. An escalation in the Middle East is possible at any time. Iran, for example, has reiterated its intention to retaliate against Israel.”

“On the other hand, demand concerns have not suddenly disappeared and a possible October OPEC+ production increase is still on the table. As a result, the upside potential for oil prices is likely to be limited.”