FTSE: Crude oil prices fluctuate due to coronavirus fears
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According to the report, Brent crude futures for July were up 97 cents, or 0.9 percent, at £88.83 a barrel at 2:20 GMT, after falling by more than £0.81 earlier in the session. US West Texas Intermediate (WTI) crude futures for June rose 42 cents, or 0.4 percent, to £88.83 a barrel, recovering from an early loss of more than $2 (£1.61).
WTI for July was up 56 cents, or 0.5percent, at $107.60 ( £86.63) a barrel.
Both benchmark prices fell about 2.5 percent on Wednesday.
Satoru Yoshida, a commodity analyst with Rakuten Securities told Economic Times: “A slump in Wall Street soured sentiment in early trade as it underlined concerns over weakening consumption and fuel demand.”
Asian stocks on Thursday tracked a steep Wall Street selloff as investors fretted over rising global inflation, China’s zero-COVID policy and the Ukraine war.
Mr Yoshida said: “Still, oil markets are keeping a bullish trend as a pending import ban by the European Union on Russian crude is expected to further tighten global supply.”
The European Union this month proposed a new package of sanctions against Russia for its invasion of Ukraine.
This would include a total ban on oil imports in six months’ time, but the measures have not yet been adopted, with Hungary being among the most vocal critics of the plan.
The European Commission unveiled on Wednesday a 210billion euro ($220 billion) plan for Europe to end its reliance NSE -1.51 percent on Russian fossil fuels by 2027, and to use the pivot away from Moscow to quicken its transition to green energy.
Also, US crude inventories fell last week, an unexpected drawdown, as refiners ramped up output in response to tight product inventories and near-record exports that have forced US diesel and gasoline prices to record levels.
Capacity use on both the East Coast and Gulf Coast was above 95 percent, putting those refineries close to their highest possible running rates.
The US Energy Information Administration estimates that stocks of US distillates – typically diesel and petrol – fell 8 percent in March to 24 percent below the five-year average.
Refining oil for petrol is historically more valuable for refineries, but Russia was a large diesel exporter meaning demand for diesel refining elsewhere has pushed up the price from refineries in other countries.
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Oil prices remain high compared with a year ago when Covid lockdowns around the world hurt demand for fuel.
But oil is well off the 10-year highs of $119 a barrel seen in March as Russia’s invasion of Ukraine shook markets.
The International Energy Agency warned then that western sanctions on Russia would remove 3m barrels a day from the global oil market.
Now the agency has said rising output from other oil producing economies and slowing demand growth could ease the situation.
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