Oil rises 4% on supply threats, still forecast for weekly decline

Oil rises 4% on supply threats, still forecast for weekly decline

The chimneys of the Total Grandpuits oil refinery are seen just after sunset, southeast of Paris, France, March 1, 2021. REUTERS/Christian Hartmann

Join now for FREE unlimited access to Reuters.com

  • Oil benchmarks head for second weekly decline
  • Putin threatens to cut off all energy sources
  • Fed’s Waller: Need aggressive rate hikes now while economy can handle it
  • Millions in China’s Chengdu thrown into prolonged COVID lockdown

NEW YORK, Sept 9 (Reuters) – Oil prices rose around 4% on Friday, supported by real and threatened supply cuts, although futures posted a second weekly decline as the rises Aggressive interest rates and COVID-19 restrictions in China have weighed on the demand outlook .

Russian President Vladimir Putin has threatened to halt oil and gas exports to Europe if price caps are imposed and a small cut to OPEC+ oil production plans announced this week has also supported prices . Read more

Brent crude rose $3.69, or 4.1%, to settle at $92.84 a barrel. U.S. West Texas Intermediate (WTI) crude rose $3.25, or 3.9%, to settle at $86.79 a barrel.

Join now for FREE unlimited access to Reuters.com

“Over the next few months, the West will have to deal with the risk of losing Russian energy supplies and soaring oil prices,” said Stephen Brennock of oil broker PVM.

Pressured by concerns about a recession and demand, Brent is down sharply from a surge in March near its all-time high of $147 after Russia invaded Ukraine.

The Group of Seven is trying to find ways to limit Russia’s lucrative oil export revenues following the invasion. A price cap the G7 countries want to impose on Russian oil to punish Moscow should be set at a fair market value less any risk premium resulting from its invasion of Ukraine, a government department official told reporters on Friday. US Treasury. Read more

Despite Friday’s rebound, both crude benchmarks were heading for a weekly decline, with Brent down about 0.2% on the week after at one point hitting its lowest level since January. WTI posted a weekly decline of 0.1%.

If the U.S. Federal Reserve is able to keep the unemployment rate below 5%, it can be aggressive in bringing down inflation, but after that trade-offs will emerge, Fed Governor Christopher Waller said on Friday. .

The Fed should be aggressive with rate hikes as the economy “may take a punch,” he said.

A US Department of Energy official said the White House is not considering further releases from the US Strategic Petroleum Reserve (SPR) at this time beyond the 180 million barrels announced by President Joe Biden he months ago. Earlier, Energy Secretary Jennifer Granholm told Reuters the administration was assessing the need for new SPR releases. Read more

“The White House is canceling another SPR release,” said Price Futures Group analyst Phil Flynn. “Looks like a lot of the fears the market had before have dissipated.”

U.S. oil rigs fell five to 591 this week, their lowest since mid-June, energy services firm Baker Hughes Co (BKR.O) said, as growth in the number of rigs and production slowed despite relatively high energy prices.

Meanwhile, the European Central Bank’s unprecedented rate hike of 75 basis points this week and more COVID-19 lockdowns in China have weighed on prices.

The city of Chengdu extended the lockdown for most of its more than 21 million residents on Thursday, while millions more in other parts of China were told to avoid travel during the upcoming holidays. Read more

Fund managers reduced their net long positions in U.S. crude futures and options by 3,274 contracts to 165,158 in the week to September 6, the Commodity Futures Trading Commission (CFTC) said on Friday. .

Join now for FREE unlimited access to Reuters.com

Reporting by Stephanie Kelly in New York; additional reporting by Alex Lawler in London, Sonali Paul in Melbourne and Jeslyn Lerh in Singapore; edited by David Gregorio and Alistair Bell

Our standards: The Thomson Reuters Trust Principles.

Stephanie Kelly

Thomson Reuters

New York-based correspondent covering the US crude market and member of the energy team since 2018 covering oil and fuel markets as well as federal renewable fuels policy.

#Oil #rises #supply #threats #forecast #weekly #decline

Leave a Comment

Your email address will not be published.