Oil prices recover, supported by tight oil supply and high summer consumption
Oil prices rebounded on Thursday after a steep decline in the previous session, supported by tight oil supplies and higher summer consumption, after a heavy US rate hike sparked fears that slower economic growth and less fuel demand would be fueled.
Brent crude futures rose 86 cents, or 0.7%, to $119.37 as of 0644 GMT, while West Texas Intermediate (WTI) crude futures rose 96 cents, or 0.8%, to $116.27 a barrel.
Prices fell more than 2% overnight after the Federal Reserve hiked key interest rates by three-quarters, the biggest increase since 1994.
There was a generally volatile session in almost all markets yesterday. Investors continued to focus on tight supply and strong demand as Western sanctions restricted access to Russian oil.
Fundamental indicators suggest that any drop in oil prices will be short-lived, shallow, or possibly both.
In Libya, oil production collapsed as production and export facilities were closed as a tactic in the country's political stalemate. It is said that oil production has decreased to 100,000-150,000 barrels per day, and it is far from the 1.2 million barrels seen last year.
Optimism that China's oil demand will recover while easing COVID-19 restrictions also bolstered the price outlook. A recovery in Chinese demand sentiment and the anticipated seasonal rise in OECD oil demand in August keep prices upward risk up until the third quarter of 2022.
U.S. crude oil production, which has been largely stagnant for the past few months, rose by 100,000 barrels per day last week to 12 million bpd, its highest level since April 2020, according to Energy Information Administration (EIA) data.
The EIA said US crude stockpiles and distillate stocks rose, while gasoline stockpiles fell in the week to June 10.
Related Articles
Oil prices are rising as supply concerns increase amid expectations of a prolonged conflict in the Middle East
Oil prices continued to rise following US and Iranian attacks on ships serving their respective purposes
Oil prices closed higher this week following renewed US-Iran hostilities
