Last Update: April 28, 2023, 02:12 AM IST
Oil prices also came under pressure as weak risk sentiment spilled over from the banking sector due to continuing slump at First Republic Bank. (Image: Reuters file)
Russian Deputy Prime Minister Alexander Novak said OPEC+ does not see the need for further cuts in oil production but is always able to adjust its policy
Oil prices recovered losses in the previous session on Thursday after a top Russian official said global oil markets were balanced.
Russian Deputy Prime Minister Alexander Novak said OPEC+ does not see the need for further cuts in oil production, but is always able to adjust its policy.
Russia is part of the OPEC+ group of oil producers that this month announced a combined cut of about 1.16 million barrels per day, a surprise decision that the US called unwise and that sent oil prices soaring.
Brent crude futures were up 68 cents at $78.37 a barrel, while West Texas Intermediate crude was up 46 cents at $74.76 a barrel.
“The small increase in crude oil prices was driven by short-covering from selling over the past several days,” said Andrew Lipo, president of Lipo Oil Associates in Houston.
On Wednesday, the benchmark fell nearly 4% as jitters about a US economic slowdown fueled a larger-than-expected draw in US crude inventories. [EIA/S]
Investors are watching economic data for any directional cues on energy demand.
US economic growth slowed more than expected in the first quarter, although jobless claims fell in the week ending April 22, data showed.
“It’s a mixed bag on interest rates, and oil doesn’t know how to take it right now,” said Phil Flynn, an analyst at Price Futures Group.
US data on Wednesday showed capital goods spending fell more than expected. Oil prices also came under pressure as weak risk sentiment spilled over from the banking sector due to continuing slump at First Republic Bank.
Analysts see weak refinery margins as a key drag on oil prices, with oil broker PVM’s Tamas Varga pointing to heating oil and gas oil as “the main likely culprit for the weakness”.
“Inventories in this product are somewhat reluctant to reduce, possibly due to resilient Russian exports,” Varga said.
Sources told Reuters that Russia has increased exports of refined products despite EU sanctions and oil price caps.
Ole Hansen, head of commodity strategy at Saxo Bank, said falling refinery profit margins could lead to cuts in runs and a further drop in crude demand.
The backwardation in the Brent futures curve has eased to around $2.20 a barrel after touching $4 a barrel on April 12.
Backwardness, when prices for front-month contracts are higher than for later-month contracts, usually indicates tight supply.
Markets will look for direction from the first quarter print of euro zone GDP growth due on Friday. The data could influence monetary policy decisions by the European Central Bank when it meets on May 4.
read all latest business news, tax news And stock market update Here
(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
