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OPEC, OPEC + two-day policy meetings begin US stocks are declining as refineries boost activity US crude production has been high since April 2020 Market skepticism about the idea of Russia’s maximum G7 oil price
NEW YORK, June 29 (Reuters) – Oil prices rose for a fourth straight session on Wednesday as data showed US crude stocks falling, fueling continued supply-side concerns, offsetting concerns about a global economy. and demand. Brent crude for August delivery was up $ 1.42, or 1.2%, at $ 119.40 a barrel at 10:59 a.m. ET (1459 GMT). The August contract will expire on Thursday and the most active contract in September was $ 115.35, up $ 1.52. US crude West Texas Intermediate (WTI) rose $ 1.13, or 1%, to $ 112.89 a barrel. Sign up now for FREE unlimited access to Reuters.com Register Both contracts rose more than 2% on Tuesday as concerns about limited supplies due to Western sanctions on Russia offset fears that demand could slow down in a possible future recession. U.S. crude stockpiles fell last week, despite production reaching its highest level since April 2020, during the first wave of the coronavirus pandemic. However, fuel stocks increased as refineries boosted activity, operating at 95% of capacity, the highest for this time of year in four years. “Supplies are limited globally, so from a big picture, we are still on the rise. Crude oil stocks are still below average,” said Phil Flynn, an analyst at Price Futures Group in Chicago. Prices soared as the G7 countries agreed to explore options to impose price caps on Russian oil exports. “Given that almost one-fifth of world oil production capacity today is subject to some form of sanctions (Iran, Venezuela, Russia), we thought there was no practical way to keep these barrels away from a market that was already extremely tight,” he said. JP. Morgan said in a research note. Norbert Rucker by Julius Baer said the concept of a price cap was difficult to understand given the presence of multiple oil prices for multiple grades and thousands of factors in the supply chain. “Buyers need to partner with a cartel and create a credible ‘threat’ scenario, both of which are challenging,” he said. OPEC and its allies, such as Russia, which makes up the OPEC + group, began a series of two-day meetings on Wednesday with sources saying the chances of a major policy change seem unlikely this month. read more Analysts worry that Saudi Arabia and the United Arab Emirates may not have enough surplus capacity to make up for lost Russian supply. French President Emmanuel Macron said this week that he had been told that these producers would find it difficult to increase production further. However, the UAE Minister of Energy said that the country, which produces about 3 million bpd, has some excess capacity above the OPEC limit of 3.17 million bpd. read more Analysts also warned that political unrest in Ecuador and Libya could further boost supply. Sign up now for FREE unlimited access to Reuters.com Register Report by Yuka Obayashi in Tokyo and Florence Tan in Singapore. Edited by Marguerita Choy and Jason Neely Our role models: The Thomson Reuters Trust Principles.
