Oil prices rose about 1% on Wednesday, recouping some of their losses in the previous session on energy demand concerns after the International Monetary Fund (IMF) cut its economic growth forecast. .
However, concerns about demand were offset by tighter supply prospects following sanctions imposed on Russia, the world’s second largest oil exporter and key European supplier, after its invasion of Ukraine.
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Rising energy prices could trigger demand rationing, ANZ Research said in a note. On the other hand, China’s COVID-zero approach and strict lockdowns keep the demand outlook subdued.
Brent crude futures rose 96 cents, or 0.9%, to $108.21 a barrel at 0004 GMT.
The first-month WTI crude futures contract, which expires Wednesday, rose $1.19, or 1.2%, to $103.75 a barrel. The second-month contract gained $1.18, or 1.2%, to $103.23 a barrel.
Both benchmarks fell 5.2% in volatile trading on Tuesday. [O/R]
The International Monetary Fund on Tuesday cut its global growth forecast by almost a percentage point, citing the economic impacts of Russia’s war in Ukraine and warning that inflation was now a “clear and present danger”. for many countries.
On the supply side, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, produced 1.45 million barrels per day (bpd) below their production targets in March, as Russian production began to decline in the wake of Western sanctions, a report by the producers’ alliance reviewed by Reuters showed.
Russia produced about 300,000 bpd below its March target of 10.018 million bpd, based on secondary sources, the report said.
Other outages added to supply concerns. Libya’s National Oil Corporation declared force majeure at the oil port of Brega on Tuesday, saying it was unable to meet its commitments to the oil market.