Oil prices bounce back from Tuesday tumble as supply concerns return


Oil prices rose on Wednesday, clawing back some of Tuesday’s heavy losses as supply concerns returned to the forefront and outweighed lingering worries over a global recession.

Brent crude futures rose by $1.62, or 1.58%, to $104.39 a barrel.

Meanwhile, US West Texas Intermediate (WTI) crude climbed $1.04, or 1.05%, to $100.54 a barrel after closing below $100 in the previous session for the first time since late April.

Both contracts on Tuesday recorded their largest daily drop since March on recessionary fears and other bearish pressures which also kept a lid on Wednesday’s price rise. read more

Oil prices have seen a knock from a resurgent dollar, which is holding at a 20-year peak against the euro and multi-month highs against other major peers.

A stronger greenback usually makes oil more expensive in other currencies, which could curb demand.

Renewed concerns of COVID-19 lockdowns across China could also cap oil price gains.

Brent’s six-month market structure was in steep backwardation of $15.12 a barrel, up by just 70 cents from the previous day. Backwardation exists when contracts for near-term delivery of oil are priced higher than those for later months.

Meanwhile, Kazakhstan said on Wednesday it was discussing measures to tackle the impact of restrictions on oil exports via the Caspian Pipeline Consortium (CPC), which ships Kazakh crude via Russia to the Black Sea. read more

The CPC, which handles about 1% of global oil, said on Wednesday that a Russian court had ordered it to suspend operations for 30 days, citing issues related to oil spills. read more

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