Oil prices in Asia saw a 1% decline due to a stronger US dollar, rising US bond yields, and mixed supply signals. Brent futures for December delivery dropped to $89.79 a barrel, while US West Texas Intermediate crude fell to $87.90 per barrel. The rise in US yields and a stronger dollar have dominated market sentiment, causing the slide in crude oil prices. Higher interest rates and a stronger dollar also make oil more expensive for holders of other currencies, potentially reducing oil demand. Turkey’s announcement that it will resume operations on a suspended pipeline from Iraq further weighed on oil prices. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, are expected to maintain their current output settings at an upcoming meeting, keeping supplies tight.

According to analysts, rising US yields and a stronger dollar have been the main factors behind the recent decline in crude oil prices. While supply remains tight, higher interest rates could lead to further destocking of oil inventories and increased spot availability. Additionally, the stronger dollar makes oil more expensive for holders of other currencies, affecting oil demand. The announcement from Turkey’s energy minister about the resumption of operations on a suspended Iraq pipeline also contributed to the decline in prices. The meeting of OPEC+ is expected to keep its output settings unchanged, signaling the possibility of further reductions in the future if market conditions require it.

With the global economy slowing down, OPEC+ is likely to maintain its current cuts in order to keep supplies tight. The group may also indicate the potential for further reductions in the future if market conditions demand it. However, analysts note that Iraq’s compliance with production cuts has been inconsistent in the past, and the resumption of operations on the Iraq pipeline could lead to an increase in export levels. Overall, the combination of a stronger dollar, rising US yields, mixed supply signals, and the potential for increased Iraqi exports has put downward pressure on oil prices in the Asian market.

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