LONDON, Oct 26 (Reuters) – Oil prices rose on Wednesday on supply issues and a weaker dollar, but U.S. inventory data capped gains.
Brent futures for December rose 54 cents, or 0.58%, to $94.06 a barrel at 13:12 GMT. U.S. West Texas Intermediate (WTI) crude futures for December rose 80 cents, or 0.94%, to $86.12.
A weaker US dollar sent a bullish signal, making oil cheaper for holders of other currencies.
Continued supply constraints added further support, with the head of the International Energy Agency pointing to the “first truly global energy crisis”.
The CEO of Saudi Aramco said there were many uncertainties ahead of planned European embargoes on crude and refined products from Russia, a member of the Saudi-led OPEC+ alliance, adding that Russian oil always find buyers.
Saudi Energy Minister Prince Abdulaziz bin Salman warned on Tuesday that energy stocks were being used as a mechanism to manipulate markets.
“OPEC’s production cuts from November and new EU sanctions on Russian oil to be applied from December should be positive (for prices),” Stephen Innes, a partner, told Reuters. Director of SPI Asset Management.
But price support was capped on Wednesday by a 4.5 million barrel increase in U.S. crude inventories in the week ending Oct. 21, according to market sources citing figures from the American Petroleum Institute. That was above the expectations of five analysts polled by Reuters.
Official US inventory data from the government’s Energy Information Administration is due at 2:30 p.m. GMT.
Rising inventories bolster fears of a global recession that would reduce demand, a weakness that also showed in weaker Chinese crude import data.
Of the WTI-Brent wide spread over the past few sessions, Innes added that WTI buyers are watching for further interventions from President Joe Biden ahead of the Nov. 8 U.S. midterm election.
Biden announced a plan last week to sell the remainder of a record release from the National Emergency Petroleum Reserve by the end of the year as he tries to control gasoline prices.
Meanwhile, Biden, facing criticism over high inflation, warned that Saudi Arabia would face consequences for aligning itself with Russia and agreeing to cut crude supply.
Reporting by Shadia Nasralla and Rowena Edwards Additional reporting by Sonali Paul in Melbourne and Jeslyn Lerh in Singapore Editing by Jan Harvey and David Goodman
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