Oil prices rose on Thursday on mounting supply tightness
concerns amid disruptions to Russian exports, the potential for
major producers to cut output, and the partial shutdown of a U.S.
refinery, Trend
reports with reference to Reuters.
Brent crude rose 59 cents, or 0.6%, to $101.81 a barrel by 0400
GMT, while U.S. West Texas Intermediate crude was up 42 cents, or
0.4%, at $95.31 a barrel.
Both crude oil benchmark contracts touched three-week highs on
Wednesday after the Saudi energy minister flagged the possibility
thatthe Organization of the Petroleum Exporting Countries and its
allies, known as OPEC+, will cut production to support prices.
Also, discussions on an agreement on Iran’s nuclear programme
remain stalled, calling into question any resumption of its
exports.
“Brent crude oil prices rebounded above the $100/barrel mark
following Saudi officials showing willingness to defend prices via
an OPEC+ production cut if necessary,” Citi analysts said in a
note.
However, there is still uncertainty ahead for OPEC+ to justify
an output reduction amid ongoing negotiations around the Iranian
nuclear deal, and a deteriorating macroeconomic picture as the
energy crunch gets worse, the Citi analysts added.
In the United States, the world’s biggest oil consumer, BP
reported shutting some units its Whiting, Indiana, refinery after
an electrical fire on Wednesday. The 430,000 barrel-per-day plant
is a key supplier of fuels to the central U.S. and the city of
Chicago.
Talks between the European Union, the U.S. and Iran to revive
the 2015 nuclear deal are continuing with Iran saying it had
received a response from the United States to the EU’s “final” text
to resurrect the agreement.
OPEC sources told Reuters that any cuts by OPEC+ are likely to
coincide with a return of Iranian oil to the market, should Tehran
secure a nuclear deal with world powers.
Falling U.S. crude and product stockpiles also added to the
upward pressure on prices. Oil inventories fell by 3.3 million
barrels in the week to Aug. 19 at 421.7 million barrels, steeper
from analysts’ expectations in a Reuters poll for a 933,000-barrel
drop.
The bullish impact was countered by a drawdown in gasoline
inventories that was less than expected, reflecting tepid
demand.
U.S. gasoline stocks fell by 27,000 barrels in the week to 215.6
million barrels, compared with earlier expectations for a 1.5
million-barrel drop.
Overall U.S. gasoline demand sunk in the most recent period,
leaving the four-week average of daily gasoline product supplied 7%
below the year-earlier period.
Discussion about this post