Singapore, August 25 (BNA): Oil prices rose today, Thursday, amid fears of tight supplies amid disruption to Russian exports, the possibility of major producers reducing production and the partial closure of a US refinery.
Brent crude rose 59 cents, or 0.6 percent, to $101.81 a barrel by 0400 GMT, while US West Texas Intermediate crude rose 42 cents, or 0.4 percent, to $95.31 a barrel.
The two benchmark contracts of crude oil touched three-week highs on Wednesday after Saudi Arabia’s energy minister signaled the possibility of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, cutting production to support prices.
Also, discussions on an agreement on Iran’s nuclear program remain stalled, raising questions about any resumption of its exports.
“Brent crude prices rebounded above $100 a barrel after Saudi officials demonstrated their willingness to defend prices by cutting OPEC+ production if necessary,” Citi analysts said in a note.
However, there is still uncertainty for OPEC+ to justify production cuts amid ongoing negotiations over the Iran nuclear deal, and the deteriorating macroeconomic picture as the energy crisis worsens, Citi analysts added.
In the United States, the world’s largest oil consumer, BP reported that it shut down some units at its Whiting refinery, Indiana, after an electrical fire on Wednesday. The 430,000 barrel per day plant is a major supplier of fuel to the central United States and the city of Chicago.
Talks are continuing between the European Union, the United States and Iran to revive the 2015 nuclear deal with Iran saying it has received a response from the United States to the EU’s “final” text to revive the agreement.
OPEC sources told Reuters that any cuts by OPEC+ would likely coincide with the return of Iranian oil to the market if Tehran concludes a nuclear deal with world powers.
Declining inventories of crude oil and US products also added to the upward pressure on prices. Oil inventories fell by 3.3 million barrels in the week ending August 19 to 421.7 million barrels, sharply more than analysts’ expectations in a Reuters poll for a drop of 933,000 barrels.
The bullish impact was countered by lower-than-expected gasoline inventories, reflecting tepid demand.
US gasoline stocks fell by 27,000 barrels in the week to 215.6 million barrels, compared to previous expectations for a 1.5 million barrel decline.
Total US gasoline demand has declined recently, leaving the four-week average for daily gasoline products supplied 7% lower than the same period last year.
HF