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Oil prices held steady in volatile trading on Monday, as traders balanced worries about tight supplies with fears that global demand could slow due to a strong U.S. dollar and possible large increases to interest rates.

Central banks around the world are certain to increase borrowing costs this week to tame high inflation, and there is some risk of a full 1 percentage point rise by the U.S. Federal Reserve.

Brent crude for November fell 6 cents to $91.29 a barrel, a 0.1 per cent loss, by 11 a.m. ET (16:00 GMT). U.S. West Texas Intermediate (WTI) for October rose 3 cents to $85.14 per barrel.

“While news that OPEC missed their production targets last month by over 3 million barrels per day should have been a positive for crude, the macro aspect of interest rate hikes and a possible recession is taking first chair,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Many traders were once again moving to the sidelines to await the Fed’s meeting this week, Kissler added.

A British public holiday for the funeral of Queen Elizabeth limited trade volume during London hours on Monday.

The Organization of Petroleum Exporting Countries and allies led by Russia, known as OPEC+, fell short of its oil production target by 3.583 million barrels per day (bpd) in August, an internal document showed. In July, OPEC+ missed its target by 2.892 million bpd.

Still, oil also came under pressure from hopes of an easing of Europe’s gas supply crisis. German buyers reserved capacity to receive Russian gas via the shut Nord Stream 1 pipeline, but this was later revised and no gas has been flowing.

Crude has soared this year, with the Brent benchmark coming close to its record high of $147 in March after Russia’s invasion of Ukraine exacerbated supply concerns. Worries about weaker economic growth and demand have since pushed prices lower.

The U.S. dollar stayed near a two-decade high ahead of this week’s decisions by the Fed and other central banks. A stronger dollar makes dollar-denominated commodities more expensive for holders of other currencies and tends to weigh on oil and other risk assets.

The market has also been pressured by forecasts of weaker demand, such as last week’s prediction by the International Energy Agency that there would be zero demand growth in the fourth quarter.

“The market still has the start of European sanctions on Russian oil hanging over it. As supply is disrupted in early December, the market is unlikely to see any quick response from U.S. producers,” ANZ analysts said.

Easing COVID-19 restrictions in China, which had dampened the outlook for demand in the world’s second-biggest energy consumer, could also provide some optimism, the analysts said.

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