Last update: April 28, 2023, 02:12 IST
Oil prices also came under pressure as low risk sentiment spilled over into the banking sector due to the continued collapse of First Republic Bank. (Image: Reuters file)
Russian Deputy Prime Minister Alexander Novak says OPEC+ sees no need for further oil production cuts but is still able to adjust policy
Oil prices stabilized on Thursday, paring losses from the previous session, after a senior Russian official said global oil markets were balanced.
Russian Deputy Prime Minister Alexander Novak said OPEC+ saw no need for further oil production cuts but was still able to adjust policy.
Russia is part of the OPEC+ group of oil producers which this month announced a combined cut of about 1.16 million barrels per day, a surprise move the United States has called reckless and which drove up oil prices.
Brent crude futures settled 68 cents at $78.37 a barrel, while West Texas Intermediate crude settled 46 cents at $74.76 a barrel.
“The slight increase in crude oil prices was caused by short-hedging selling over the past few days,” said Andrew Lipow, president of Lipow Oil Associates in Houston.
Benchmarks fell nearly 4% on Wednesday as jitters over a slowing U.S. economy overshadowed a bigger-than-expected drop in U.S. crude inventories. [EIA/S]
Investors are watching economic data for any directional cues in energy demand.
U.S. economic growth slowed more than expected in the first quarter, although jobless claims fell in the week ending April 22, the data showed.
“It’s kind of a mixed bag on interest rates, and oil doesn’t know how to take it right now,” said Price Futures Group analyst Phil Flynn.
On Wednesday, US data showed spending on capital goods fell more than expected. Oil prices also came under pressure as low risk sentiment spilled over into the banking sector due to the continued collapse of First Republic Bank.
Analysts see low refining margins as a major drag on oil prices, with oil broker PVM’s Tamas Varga pointing to fuel oil and diesel as “the main possible culprit for the outsized weakness”.
“Stocks of this product are somewhat reluctant to run out, possibly due to the resilience of Russian exports,” Varga said.
Russia increased its exports of refined products despite an EU embargo and a cap on oil prices, sources told Reuters.
Falling refinery profit margins could lead to cycle cuts and a further reduction in crude demand, said Ole Hansen, head of commodities strategy at Saxo Bank.
The decline in the Brent futures curve eased to around $2.20 a barrel, after touching $4 a barrel on April 12.
Forwarding, when the prices of the first month’s contract are higher than those of the contracts of the following months, generally indicates a tight supply.
Markets will turn to the first quarterly release of eurozone gross domestic product growth, due Friday. The data could affect monetary policy decisions by the European Central Bank at its May 4 meeting.
Read all the latest business news, tax news and stock market updates here
(This story has not been edited by News18 staff and is published from a syndicated news agency feed)