On Thursday, crude oil prices clawed back their previous losses due to the supply shortfall warning of the International Energy Agency.
Accordingly, Brent crude futures edged up 2.37% or 2.30 points to $100.35 per barrel. The international benchmark reversed its loss of 1.89% to $98.02 per barrel.
At the same time, US West Texas Intermediate contracts increased 2.33% or 2.21 points to $97.22 per barrel. Its upturn came after 1.45% to $95.04 per barrel.
The IEA forecasted that markets could lose 3.00 million barrels per day of Russian crude and refined products from April.
Subsequently, this projected downturn exceeded the prior expected drop of 1.00 million bpd.
The Paris-based organization explained that sanctions and buyer reluctance to buy Moscow’s crude pushed up energy prices.
These mounting costs hit personal budgets, drive inflation, and slow down economic recovery.
Experts anticipated the surging prices of the black liquid could trigger policy reactions from central banks worldwide.
Additionally, the IEA lowered its oil demand estimates by 1.30 million bpd for the second to fourth quarters.
For the full year, it reduced its growth forecast by 950,000 bpd to 2.10 million bpd. This decline would result in an average of 99.70 million bpd, hovering below pre-pandemic levels.
Moreover, leading OPEC+ producers Saudi Arabia and the United Arab Emirates did not fully open their taps.
Consequently, IEA does not expect output rises from Canada, the United States, and others to eliminate worldwide undersupply.
In line with this, crude storage levels stood at their lowest levels since April 2014. As a result, the agency expects a supply deficit of 700,000 bpd in the second quarter across the globe.
Crude rises after EIA report, Fed hike
Crude oil prices sagged on Wednesday’s trading session after the upbeat report of the US Energy Information Administration.
Subsequently, oil inventories in the United States edged up by 4.30 million. The figure significantly surpassed analysts’ expected decline of 1.40 million barrels.
This positive movement resulted in a total of 415.90 million barrels in the week of March 11.
Then, crude stocks at the Cushing, Oklahoma, delivery hub jumped by 1.80 million barrels to 24 million barrels.
Experts explained that the recent disruption on the Marathon Pipeline could have caused inventories to back up into the city.
Moreover, oil traders largely shrugged off a move by the Federal Reserve. As widely anticipated, the American central bank increased interest rates by one-quarter of a percentage point.
Nevertheless, investor sentiment gained pace after China pledged policies to boost financial markets and economic growth.
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