Oil prices rise from three-week low as supply issues persist

By Ahmad Ghaddar

LONDON (Reuters) – Oil prices rose on Thursday from a three-week low hit in the previous session after consuming nations announced a huge release of oil from emergency reserves amid concerns over the Limited supply further clouded the market outlook.

Brent crude futures climbed $1.05, or 1.%, to $102.12 a barrel at 0921 GMT, while US West Texas Intermediate (WTI) crude futures rose by 86 cents, or 0.9%, to $97.09 a barrel.

Both benchmarks plunged more than 5% in the previous session and hit their lowest closing levels since March 16.

International Energy Agency member countries agreed on Wednesday to release 60 million barrels on top of a release of 180 million barrels announced by the United States last week to help bring prices down in a supply fears following Russia’s invasion of Ukraine.

Japan will release 15 million barrels of oil from public and private reserves as part of the move, the Kyodo news agency reported on Thursday.

“While this is the biggest release since the stock’s inception in 1980, it will fail to change oil market fundamentals,” ANZ Bank said of the US post.

ANZ argued that the release is likely to delay further production increases from major producers and could give OPEC+ more “wiggle room in the face of calls to increase production further”.

Other analysts, however, see the stock release as a big relief to market tightness issues.

“Given these quantities, earlier concerns about supply shortages are no longer warranted, as the price trend also shows,” Commerzbank said, noting that Brent prices have fallen around $12 since then. the first announcement of a US release. Last week.

China’s oil demand is expected to rebound to 14.26 million barrels per day (bpd) in the second quarter, after falling to 13.9 million bpd in the previous quarter as the country’s zero COVID policy dampened consumption, said a senior researcher from China National Petroleum Corp (CNPC) said.

China, the world’s biggest oil importer, said it would strictly control new capacity in its oil refining industry and speed up the elimination of inefficient and obsolete production capacity.

Stalled indirect talks between Iran and the United States on reviving a 2015 deal on Tehran’s nuclear program have further delayed the potential lifting of sanctions on Iranian oil, keeping the market tight.

Political decisions are needed in Tehran and Washington to overcome the remaining problems, according to the negotiators.

(Additional reporting by Sonali Paul in Melbourne and Muyu Xu in Beijing; Editing by Kim Coghill)

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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