OPEC's oil production cuts may begin to be felt this week - Houston Chronicle

OPEC's oil production cuts may begin to be felt this week

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People work on a drilling rig as the sun sets in Pecos. Bargain hunters helped pull West Texas Intermediate, the U.S. benchmark for the price of oil, back above $70 per barrel on Friday, but the contract was in the $80 range as recently as April 18. Jon Shapley, Houston Chronicle / Staff photographer

Oil market analysts believe last week’s dramatic sell-off was a reflection of fear rather than something fundamental, putting the focus squarely on upcoming demand estimates from the likes of OPEC for clues about the economy.

Crude oil prices took a beating last week amid concerns about the health of the U.S. banking sector and lingering fears of a recession. When announcing another rate hike of 25 basis points last week, U.S. Fed Chair Jerome Powell suggested that, while the world’s largest economy could fall into a mild recession, more work may be needed to bring inflation down to the Fed’s 2 percent target rate.