Oil prices rise on concerns over tight supplies

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Oil prices rose in volatile trade on Tuesday as worries about tight fuel supplies ahead of winter offset investor concerns about lower demand in China, the world’s biggest crude importer, and further increases in U.S. and European interest rates.

Brent crude had risen 50 cents, or 0.5%, to $94.50 a barrel, while WTI crude increased by 52 cents, or 0.6%, to $88.30 a barrel. Both contracts fell by more than $1 earlier in the session.

Worries over tighter inventories continue to support prices.

In the United States, the Strategic Petroleum Reserve (SPR) fell 8.4 million barrels to 434.1 million barrels in the week ended Sept. 9, the lowest since October 1984, according to data released on Monday by the Department of Energy.

U.S. President Joe Biden in March set a plan to release 1 million barrels per day over six months from the SPR to tackle high U.S. fuel prices, which have contributed to inflation.

U.S. commercial oil stocks are expected to have fallen for five weeks in a row, dropping by around 200,000 barrels in the week to Sept. 9, a preliminary Reuters poll showed on Monday.

The American Petroleum Institute (API), an industry group, will issue its inventory report at 4:30 p.m on Tuesday. The U.S. Energy Information Administration (EIA) reports at 10:30 a.m on Wednesday.

Prospects for a revival of the West’s nuclear deal with Iran remained dim.

Germany expressed regret on Monday that Tehran had not responded positively to European proposals to revive the 2015 agreement.

U.S. Secretary of State Antony Blinken said that an agreement would be unlikely in the near term.




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