Oil prices rise 1% as supply concerns persist
- Brent crude futures increased by 73 cents, or 0.8%, to $90.76 a barrel
- West Texas Intermediate crude was trading at $83.95 a barrel, up $1.13, or 1.4%
- Brent and WTI fell 1.7% and 3.1% in the previous session, respectively
Oil prices rebounded in morning trade on Wednesday, reversing earlier session losses, as concerns about limited supply following reports of reduced stocks in the United States countered concerns about decreased demand from top oil importer China.
Brent crude futures increased by 73 cents, or 0.8%, to $90.76 a barrel. West Texas Intermediate crude in the United States was trading at $83.95 a barrel, up $1.13, or 1.4%. The front-month contract for WTI ends on Thursday.
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Brent and WTI fell 1.7% and 3.1% in the previous session, respectively, on reports of US President Joe Biden’s plans to release additional barrels from the Strategic Petroleum Reserve (SPR) and concerns about weakening Chinese fuel demand.
American Petroleum Institute numbers released on Tuesday show that for the week ended October 14, U.S. crude oil stockpiles decreased by around 1.3 million barrels.
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The Energy Information Administration, the statistics arm of the United States Department of Energy, is set to release inventory figures on Wednesday.
The OPEC+ output cut, which comes ahead of a European Union ban on Russian oil, will further constrain supply in an already constrained market. Sanctions imposed by the European Union on Russian crude and oil products will go into effect in December and February, respectively.
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To close the deficit, the Biden administration intends to release additional oil from the SPR before next month’s elections.
In Europe, the EU’s emergency oil inventories, which include crude oil and petroleum products, rose marginally in July after two coordinated releases depleted the levels to a record low in June, but were still 3.7% lower than in July 2021, according to the bloc’s statistics agency.
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Fears of reduced fuel demand from China as it maintains its tough zero-COVID policy capped oil price gains.
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