Oil rebounds as supply concerns dominate

An employee holds a sample of crude oil at the Yarakta oil field, owned by Irkutsk Oil Co, in Irkutsk region, Russia, March 11, 2019. REUTERS/Vasily Fedosenko

Sign up now for FREE unlimited access to Reuters.com

to register

  • IMF lowers global growth forecast by almost 1 percentage point
  • OPEC+ supply gap widens in March as sanctions hit Russian manufacturing
  • Libya’s NOC declares force majeure at Brega oil port
  • US crude inventories fell 4.5 million barrels last week – API

LONDON, April 20 (Reuters) – Oil prices rallied on Wednesday as a fall in US oil inventories and concerns about tighter supplies from Russia and Libya prompted a rebound from sharp losses in the previous session.

Brent crude futures were up 66 cents, or 0.6%, to $107.91 a barrel by 0948 GMT.

WTI crude oil futures contract for the front month, which expires on Wednesday, rose 78 cents, or 0.8%, to $103.34, while the contract for the second month rose 69 cents to $102.74.

Sign up now for FREE unlimited access to Reuters.com

to register

The two main benchmarks were down 5.2% on Tuesday in volatile trade after the International Monetary Fund (IMF) cut its projected global growth forecast by nearly a full percentage point, citing the economic fallout from Russia’s war in Ukraine and the Inflation warning a “clear and present danger” for many countries. Continue reading

“Slacking growth and rising inflationary pressures can only mean one thing: the specter of stagflation looms over the global economy,” said PVM analyst Stephen Brennock.

Global oil prices have been boosted by a tighter supply outlook following sanctions against Russia – the world’s second largest oil exporter and a key European supplier – over its invasion of Ukraine, which Moscow is calling a “special operation”.

However, a weaker global economic outlook and ongoing COVID-19 lockdowns in China have hurt demand from the world’s largest crude oil importer and weighed on prices.

On the supply side, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, produced 1.45 million barrels per day (bpd) below their production target in March, as Russian production surged after US-imposed sanctions West began to sink, a report by the producers’ alliance showed. Continue reading

Various failures increased concerns about the supply. OPEC member Libya was forced to shut down a number of oil facilities, including the 300,000 bpd Sharara oil field, by a wave of protests. Continue reading

Libya’s National Oil Corporation declared force majeure at the Brega oil port on Tuesday, saying it was unable to meet its obligations to the oil market.

The Caspian Pipeline Consortium (CPC) Black Sea terminal could be back to full capacity as early as Wednesday, Kazakh Energy Minister Bolat Akchulakov said. The CPC pipeline and terminal, which transports about 80% of Kazakhstan’s crude oil exports, has been operating at half capacity after a storm damaged two of its three piers last month.

In the United States, crude inventories fell by 4.5 million barrels last week, market sources said, citing Tuesday figures from the American Petroleum Institute.

The Energy Information Administration (EIA), the US Department of Energy’s statistical division, will release its weekly data Wednesday at 10:30 am EDT (1430 GMT).

Sign up now for FREE unlimited access to Reuters.com

to register

Reporting by Ahmad Ghaddar Additional reporting by Florence Tan in Singapore Editing by David Goodman

Our standards: The Thomson Reuters Trust Principles.

About Christine Geisler

Check Also

CDC investigating outbreak of Covid-19 aboard Carnival cruise ship – Boston News, Weather, Sports

(CNN) — The Centers for Disease Control and Prevention is investigating a recent Covid-19 outbreak …