Crude oil storage tanks are seen from above at the Cushing Oil Center in Cushing, Oklahoma, March 24, 2016. REUTERS / Nick Oxford / File Photo
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- Fears of recession continue to limit price gains
- China reports new cases of COVID across the country
- The dollar remains at a 20-year high against the euro
- Kazakhstan is discussing measures to address export restrictions
LONDON, July 6 (Reuters) – Oil prices rose on Wednesday, recovering some of Tuesday’s heavy losses as supply concerns returned to the forefront and overcame persistent concerns about a global recession.
Brent crude futures rose $ 1.62, or 1.58%, to $ 104.39 a barrel at 8:39 GMT.
US West Texas Intermediate (WTI) crude rose $ 1.04, or 1.05%, to $ 100.54 a barrel after closing below $ 100 the previous session for the first time since late of April.
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Both contracts on Tuesday recorded their biggest daily drop since March for fears of recession and other bearish pressures that also slowed Wednesday’s price rise. Read more
Oil prices have suffered a resurgent dollar blow, which remains at a 20-year high against the euro and several-month highs against other big mates.
A stronger greenback usually makes oil more expensive in other currencies, which could slow demand.
Renewed concerns about COVID-19 blockades in China could also limit oil price gains. Read more
And the Norwegian government intervened on Tuesday to end a strike in the oil sector that had cut oil and gas production, ending a stalemate that could have worsened Europe’s energy crisis. Read more
But analysts expect a rapid rebound in oil prices as supply constraints persist and first-month spreads have held despite Tuesday’s falling prices.
Brent’s six-month market structure stood at a sharp decline of $ 15.12 a barrel, just 70 cents more than the day before. The backlog exists when short-term oil delivery contracts are priced higher than in subsequent months.
“Overnight price action, with both contracts trading in ranges of about $ 15, hints more at panic and forced liquidation than a structural change in the supply and demand situation globally, ”said Jeffrey Halley, senior market analyst at OANDA, and added. that oil prices may be in danger of surpassing the downside.
Meanwhile, Kazakhstan said on Wednesday it was discussing measures to address the impact of restrictions on oil exports through the Caspian Pipeline Consortium (CPC), which sends Kazakh crude across Russia to the Black Sea. Read more
The CPC, which manages about 1 percent of the world’s oil, said Wednesday that a Russian court had ordered it to suspend operations for 30 days, citing issues related to the oil spills. Read more
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Additional report by Emily Chow in Kuala Lumpur, Arathy Somasekhar in Houston; Edited by Raju Gopalakrishnan
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