Oil prices held steady on Wednesday after falling the previous session, as an increase in U.S. crude inventories and global recession fears offset optimism for a Chinese demand recovery.
Due to the end of China’s COVID-19 controls and expectations that the rise in US interest rates will soon slow, crude has increased in 2023, with global benchmark Brent crude surpassing $89 barrel this week.
Brent crude was up 7 cents, or 0.1%, to $86.06 per barrel, after falling 2.3% the previous session. After a 1.8% drop on Tuesday, West Texas Intermediate (WTI) U.S. crude gained 27 cents, or 0.3%, to $80.40.
The American Petroleum Institute reported Tuesday that US crude stockpiles rose by about 3.4 million barrels in the week ending January 20, bringing down prices.
At 1530 GMT, the U.S. Energy Information Administration publishes the official inventory data.
Worries about a slowing economy also affected oil. According to data released on Tuesday, business activity in the United States decreased for the seventh consecutive month in January.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, should continue to supply a stable amount of oil.
OPEC+ sources claim that an OPEC+ panel will probably support the group’s current policy at its meeting on February 1. OPEC+ decided to cut production by 2 million barrels per day in October instead of November to 2023 due to a weaker economic outlook.
Russian Natural Gas Shipments
The Tashkent government announced on Wednesday that Russia and Uzbekistan are investigating the prospect of arranging for Russian natural gas shipments to the Central Asian nation via a pipeline presently used to pump it in the opposite direction.
The energy ministries of Uzbekistan and Russia’s Gazprom (GAZP.MM) have agreed to work out the technical specifications for such supplies. Still, they haven’t discussed commercial terms, according to the ministry.
The Central Asia-Center pipeline was constructed to move gas from Central Asia to the west. Even though Gazprom only buys a small amount of the product from Turkmenistan, they still use it to transport gas to Russia. Uzbekistan, a former gas exporter, has been experiencing energy shortages in recent years, which have become acute this winter due to extremely cold weather and Turkmen supply disruptions.