Oil firms supported by supply concerns after downgrading US ‎credit rating

Oil prices moved in a narrow range today, Thursday, after two days of a sharp decline yesterday, Wednesday, as the downgrade of America’s credit rating affected sentiment, but fears of a shortage of supply provided some support.

According to Reuters, Fitch Ratings lowered the credit rating of America, the world’s largest oil consumer, reflecting expectations of financial deterioration, political polarization and the global situation of the dollar.

Despite the broader decline in sentiment, oil prices received some support on concerns of supply shortages due to production cuts by major producers, which are expected to be extended at a meeting scheduled for Friday.

Brent crude futures rose 4 cents to $83.24 a barrel, while US West Texas Intermediate crude rose 0.1% to $79.53 a barrel.

Both benchmarks traded near their highest since April on Wednesday, but settled down 2% after the US credit rating was downgraded. West Texas Intermediate crude prices rose about 16% in July, while Brent crude rose more than 14%.

The next meeting of the Joint Ministerial Monitoring Committee of the OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and other allies, is scheduled to take place on Friday.

Reuters reports indicate that it is unlikely that the OPEC + alliance will modify current production policies, as Saudi Arabia is expected to extend the voluntary cut by one million barrels per day for another month, to include September.