Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Crude Oil Higher; Rebounding on Supply Tightness

Commodities Jul 06, 2022 21:24
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Peter Nurse   

Investing.com -- Oil prices rose Wednesday, bouncing after the previous session’s heavy losses as traders renewed their focus on supply tightness despite worries over potential demand destruction in the wake of a global recession.

By 9:10 AM ET (1310 GMT), U.S. crude futures traded 0.1% higher at $99.56 a barrel, after closing below $100 for the first time since late April, while the Brent contract rose 0.7% to $103.53, after plunging 9.5% on Tuesday.

U.S. Gasoline RBOB Futures were up 1% at $3.6628 a gallon.

Both contracts recorded their largest daily drop since March on Tuesday, but have seen a quick resurgence as supply tightness persists.

The Organization of the Petroleum Exporting Countries Secretary-General Mohammad Barkindo said on Tuesday, just hours before he passed away, that the industry faces some problems due to years of under-investment.

He added that supply tightness could be eased if extra supplies from Iran and Venezuela were allowed - but additional supply from Iran doesn’t look likely in the near future. 

This follows the Persian Gulf country rejecting a plan to return to the 2015 international nuclear accord, with recent negotiations in Doha a “wasted occasion,” according to Robert Malley, the U.S. Special Envoy for Iran.

“The oil market remains tight and given the expectation that Russian oil supply will decline as we move through the year, the market is set to remain tight,” said analysts at ING, in a note. “Therefore, we expect any further downside in the market to be fairly limited.”

The Norwegian government attempted to ease some of the pressures by intervening to end a strike by some of the country’s offshore workers, meaning that all the oil and gas fields that were affected by a strike are expected to be back in full operation within a couple of days.

Limiting Wednesday’s gains has been the strength of the U.S. dollar, which climbed to a 20-year high against the euro. A stronger greenback usually makes oil more expensive in other currencies, which could curb demand.

Additionally, a new program of virus testing in Shanghai raises fears that China’s financial center will be plunged back into another shutdown just as the country’s consumption of gasoline and diesel nears a return to pre-Covid levels.

Weekly crude inventory data from the industry body American Petroleum Institute will be published later in the session, after being delayed by Monday’s holiday.

Crude Oil Higher; Rebounding on Supply Tightness
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email