© Reuters. FILE PHOTO: An oil pump injects oil in a field near Calgary, Alberta, Canada on July 21, 2014. REUTERS / Todd Korol
By Scott DiSavino
NEW YORK (Reuters) – Oil prices rose about 3% on Thursday as strong U.S. fuel consumption data and an expected decline in Russian supply by year-end offset concerns that economic growth could be weak. A slowdown in the economy could reduce demand.
Oil futures prices rose $2.47, or 2.6%, to $96.12 a barrel by 11:41 a.m. EDT (15:41 GMT), while U.S. West Texas Intermediate (WTI) crude was up 2. .16 USD, or 2.5%, to 90.27 USD.
Prices rose more than 1% in the previous session, although at one point Brent fell to its lowest level since February, as signs of a recession loomed in some places.
Analysts at energy consulting firm Ritterbusch and Associates said the oil complex is “driving large (U.S.) crude inventories, increased product demand, and a clear stagnation in crude oil prices. Iran nuclear talks,” analysts at energy consulting firm Ritterbusch and Associates said in a note.
Stocks fell 7.1 million barrels in the week to Aug. 12, Energy Information Administration (EIA) data showed, versus expectations for a 275,000-barrel drop, as exports hit a record 5 million bpd. day (bpd).
European Union bans on Russian exports could tighten supplies as restrictions on seaborne crude oil and products entering the bloc increase in the coming months and push up prices, traders said. alarm analysis.
“EU sanctions will force Russia to shut down production by around 1.6 million bpd by year-end, increasing to 2 million bpd by 2023,” research consultancy BCA said in a statement. note. “EU sanctions on Russian oil imports will significantly tighten the market and lift Brent prices to $119 per barrel by year-end.”
However, Russia forecasts output and exports will increase until the end of 2025, according to an Economy Ministry document released by Reuters, which says revenue from energy exports will grow by 38% this year, in part. due to higher oil exports.
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Preventing oil prices from getting too high is the possibility of increased supply from Iran and concerns that demand could fall if China imposes more lockdown measures to prevent the spread of COVID, along with economic growth. economy slowed as central banks raised interest rates to control inflation.
The market is awaiting developments from talks aimed at reinstating Iran’s 2015 nuclear deal with world powers, which could lead to an increase in Iranian oil exports by around 1 million barrels per day. day.
“We could see traders taking a more cautious approach considering how close a decision on the Iran nuclear deal looks,” said Craig Erlam, senior market analyst at OANDA. . “There is still a lot of doubt that it will be off-limits but if it does, it could be the catalyst for another move lower.”
Open interest on US futures on the New York Mercantile Exchange fell on Wednesday to its lowest level since January 2015 for a third straight day as investors cut riskier assets. Like commodities, central banks are concerned about further rate hikes.
San Francisco Federal Reserve President Mary Daly said a rate hike of 50 or 75 basis points in September would be a “reasonable” way to reduce short-term borrowing costs to the extent necessary to reduce inflation. broadcast.
Meanwhile, hit a three-week high on Thursday.
A stronger dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies.
