Oil Up on Supply Concerns after Declining During Previous Two Sessions
2022.07.07 08:21
Oil was up on Thursday morning in Asia on supply concerns, after falling during the previous two sessions.
Brent oil futures rose 0.51% to $101.20 by 1:05 AM ET (5:05 AM GMT) and crude oil WTI futures jumped 0.56% to $99.11. Both benchmarks closed on Wednesday at their lowest since April 11. The declines follow a dramatic fall on Tuesday despite tight global supplies.
“Oil is getting decimated with little new information about production or consumption,” said Stephen Innes, managing partner of SPI Asset Management.
“Still, with commodity traders turning very risk-averse due to growing demand and still hawkish (U.S.) Fed policy concerns, the recessionary headline risk is like an anvil around the market’s neck.”
Oil prices have slid alongside other commodities such as metals and palm oil as global central banks hiked interest rates, which spurred fears of a recession that could dampen demand for commodities.
“It seems as though the market is starting to price in that scenario,” ING’s head of commodity research Warren Patterson told Reuters, referring to recession.
For the supply side, investors are assessing possible oil supply disruption at the Caspian Pipeline Consortium (CPC), which has been told by a Russian court to suspend activity for 30 days. Exports at CPC, which handles about 1% of global oil supplies, were still flowing as of Wednesday morning.
Crude supply data from the American Petroleum Institute, released on Wednesday, showed a draw of 3.825 million barrels.
Investors now await U.S. crude supply data from the U.S. Energy Information Administration, which will be released later in the day.
