LONDON – Thursday’s oil prices were stable after falling to near six-month lows.
Brent crude futures inched up 36 cents, or 0. 37 percent to $97. 14 a barrel by 0925 GMT, while West Texas Intermediate (WTI) crude futures were up 43 cents, a 0. 47 percent gain, at $91.09.
Both benchmarks fell to on Wednesday to their weakest levels since before Russia’s Feb. 24 invasion of [Ukraine], that Moscow calls “a special operation.”
The sudden surge in crude oil inventories at the U.S. last week prompted this move. The Energy Information Administration reported that gasoline stocks, which are a proxy for demand, showed an unexpected increase as demand slows.
The decision on Wednesday by the Organization of the Petroleum Exporting Countries and allies such as Russia, known as OPEC+, to raise its oil output target by 100,000 barrels per day (bpd) in September has added to bearish sentiment.
” The largely symbolic rise will not offer a substantial buffer against any possible supply shocks, but the oil balance won’t get tighter either,” stated Tamas Varga, an oil broker at PVM.
While the increase is equivalent to just 0.1 percent of global demand, the demand outlook remains clouded by rising fears of an economic slump in the United States and Europe, debt distress in emerging market economies, and a strict zero COVID-19 policy in China, the world’s largest oil importer.
Despite this, the limited reserves of the group, highlighted by a Wednesday statement, are providing a level playing field for oil prices.
” We believe that (limited spare capacity), will result in an increase in production of only one-third the volumes agreed in September,” UBS oil analyst Giovanni Staunovo stated.
Edward Moya is a senior analyst at OANDA and said that he expects prices to rise despite the declining economic environment.
“Crude prices should find strong support around the $90 level and eventually will rebound towards the $100 barrel level even as the global economic slowdown accelerates,” he said.
Additional support for price came from Caspian Pipeline Consortium, (CPC), which links Kazakh oil fields to the Russian Black Sea port at Novorossiisk. It stated Wednesday that supply was significantly lower.
By Rowena Edwards