By Gina Lee
Investing.com – Oil was up on Thursday morning in Asia, recovering from early losses as concerns over tight global supplies outweighed fears over slower economic growth.
Brent oil futures jumped 1.45% to $110.69 by 12:58 AM ET (5:58 AM GMT), after falling by more than $1 earlier in the session. WTI futures rose 1.07% to $108.18 recovering from an earlier loss of more than $2 and were up 56 cents, or 0.5%, at $107.60 a barrel for July 2022.
Both Brent and WTI benchmarks fell about 2.5% on Wednesday.
"A slump in Wall Street soured sentiment in early trade as it underlined concerns over weakening consumption and fuel demand," Rakuten Securities commodity analyst Satoru Yoshida told Reuters.
Asian stocks on Thursday followed a steep Wall Street selloff, as rising global inflation, China's zero-COVID policy, and the Ukraine war led to fears of an economic recession.
"Still, oil markets are keeping a bullish trend as a pending import ban by the European Union on Russian crude is expected to further tighten global supply," said Yoshida.
The European Union earlier in the month proposed a new package of sanctions against Russia for its invasion of Ukraine on Feb. 24. The package includes a total ban on Russian oil imports in six months' time, but the measures have not yet been adopted amid continued resistance to the plan from member countries including Hungary.
On Wednesday, the European Commission unveiled a EUR210 billion ($220.65 billion) plan for Europe to end its reliance on Russian fossil fuels by 2027.
Meanwhile, Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration showed a draw of 3.394 million barrels for the week to May 13. Forecasts prepared by Investing.com predicted a build of 1.383 million barrels, while an 8.487-million-barrel build was reported during the previous week.
Crude oil supply data from the American Petroleum Institute released the day before, showed a draw of 2.445 million barrels. Capacity use on both the East Coast and Gulf Coast was above 95%, with those refineries near their highest possible running rates.