Commodities News

Oil Up, but Remains in Narrow Range Over Tight Supplies

By Gina Lee – Oil was up on Thursday morning in Asia but remained in a narrow range after supplies from Libya shook markets earlier in the week.

Brent oil futures jumped 0.92% to $107.78 by 12:11 AM ET (4:11 AM GMT) and WTI futures rose 0.83% to $103.04.

Markets are likely to become volatile again soon, with the European Union still weighing a ban on Russian oil for its invasion of Ukraine on Feb. 24, according to analysts.

“Oil, and energy markets generally, have plenty of big issues in a state of flux to stay quiet for long,” Commonwealth Bank commodities analyst Tobin Gorey told Reuters.

Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), said on Wednesday that the country was losing more than 550,000 barrels per day of oil output thanks to blockades at major fields and export terminals.

Investors also continue to monitor fuel demand in China, as the country slowly eases strict COVID-19 curbs. However, the oil market remains tight as OPEC and allies, or OPEC+, continues its struggle to meet its production targets.

“There is not much incremental news overnight, with a trajectory from here really hinging on whether other nations join the UK/U.S. in banning Russian oil imports,” SPI Asset Management managing director Stephen Innes said in a note.

European Union countries are currently evaluating methods to offset a potential ban on Russian oil, but no decisions have been made yet on a sixth package of sanctions eight weeks after the war in Ukraine started.

Meanwhile, Wednesday’s crude oil supply data from the U.S. Energy Information Administration showed a draw of 8.020 million barrels for the week ended Apr. 15. Forecasts prepared by predicted a 2.471-million-barrel build and a 9.382-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 4.496 million barrels.

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