- Russia and Saudi Arabia have extended their voluntary oil supply cuts until the end of the year.
- Oil prices have surged past $90 once again.
- This latest move could trigger a rise in fuel prices, negatively impacting the fight against inflation.
The latest developments in the oil market could have significant implications for cryptocurrency investors, as rising fuel prices could lead to increased inflation and potentially impact monetary policy.
The Impending Rise in Fuel Prices
While it may not seem immediately obvious, there is a significant link between fuel prices and the world of cryptocurrencies. A decrease in fuel prices has been a major factor in reducing US inflation. However, recent announcements from Russia and Saudi Arabia suggest that global fuel prices could continue to rise until the end of the year.
Voluntary supply cuts from Saudi Arabia and Russia have been extended. The production cut of 1.3 million barrels will continue for another three months until December. This news has pushed the price of oil past $90. In Turkey and other parts of the world, pump prices will soon be updated due to rising global prices. This could lead to a continuation of inflation increases, potentially causing the Federal Reserve to tighten monetary policy and delay rate cuts.
Why Might Cryptocurrencies Fall?
If inflation continues to rise, or if the decrease in inflation is halted due to rising fuel prices, the Federal Reserve may be forced to act. Today’s negative Bitcoin price could be somewhat related to this. Moreover, we will see the effects of rising oil prices in the September inflation figures next month. Remember a few months ago when we said that an oil price below $68 would support a decrease in inflation. Now, the price hovering around $90 will erase the decrease in many items.
The Saudi Press Agency announced on Tuesday that Riyadh’s decision to extend the voluntary cut of 1 million barrels will be reviewed monthly to assess whether the cut should be deepened or production increased. Deputy Prime Minister Alexander Novak announced on Tuesday that OPEC+ member Russia has also extended its voluntary cuts until the end of the year to “maintain stability and balance” in the oil markets. Russia is also reducing its oil production by 500,000 barrels/day until the end of 2024.
Conclusion
Investors should be aware that cryptocurrencies carry high volatility and therefore risk. Transactions should be carried out based on their own research. This article does not contain any investment advice.
