Oil Prices Rise On Possible OPEC Supply Cuts
Oil prices rose on Thursday on mounting supply tightness concerns amid disruptions to Russian exports, the potential for major producers to cut output, and the partial shutdown of a U.S. refinery.
Brent crude rose 59 cents, or 0.6%, to $101.81 a barrel by 0400 GMT, while U.S. West Texas Intermediate crude was up 42 cents, or 0.4%, at $95.31 a barrel.
Both crude oil benchmark contracts touched three-week highs on Wednesday after the Saudi energy minister flagged the possibility that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, will cut production to support prices.
Also, discussions on an agreement on Iran’s nuclear programme remain stalled, calling into question any resumption of its exports
“Brent crude oil prices rebounded above the $100/barrel mark following Saudi officials showing a willingness to defend prices via an OPEC+ production cut if necessary,” Citi analysts said in a note.
However, there is still uncertainty ahead for OPEC+ to justify an output reduction amid ongoing negotiations around the Iranian nuclear deal, and a deteriorating macroeconomic picture as the energy crunch gets worse, the Citi analysts added.
In the United States, the world’s biggest oil consumer, BP reported shutting some units of its Whiting, Indiana, refinery after an electrical fire on Wednesday. The 430,000 barrel-per-day plant is a key supplier of fuels to the central U.S. and the city of Chicago.
Talks between the European Union, the U.S. and Iran to revive the 2015 nuclear deal are continuing with Iran saying it had received a response from the United States to the EU’s “final” text to resurrect the agreement. Reuters.
