ISLAMABAD
Crude oil prices moved up on Wednesday on lower US crude oil stockpiles as well as shrinking supplies from Russia and China’s commitment to “restore and expand” consumption, providing support to its economic growth. As of 1125 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.27 (+0.34 percent) to reach $79.90 a barrel.
The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.12 (+0.16 percent) to $75.87 a barrel.
The price of Russian Sokol increased by $1.22 (+1.75 percent) to $71.10. Arab Light prices witnessed an increase of $1.55 (+1.89 percent) to reach $83.46 a barrel. On the other hand, the price for Opec Basket increased by $2.01 (+2.51 percent) to $82.06. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
Oil markets have enjoyed a sustained rally over the past three weeks, with oil prices briefly moving above $80 per barrel for the first time in two months ostensibly thanks to rising demand and OPEC+ supply cuts finally causing global markets to tighten.
Concerns about the US demand and potential interest rate hikes by the Federal Reserve impacted the market. However, China’s commitment to supporting economic growth and implementing policies to bolster consumption could potentially boost oil demand.
China, the world’s second-largest economy, has pledged to “restore and expand” consumption, providing support to its economic growth. Analysts believe that successful stimulus measures in China could significantly tighten oil balances, even if Europe were to experience a mild recession.
In terms of supply, data from the American Petroleum Institute (API) showed a decrease in crude oil, gasoline, and distillate inventories. Although expectations for a crude draw of 2.3 million barrels were not met, with only 800,000 barrels being drawn, this still contributed to the market’s stability.
In addition to this, Russia plans to reduce its oil exports by 2.1 million metric tons in the third quarter, consistent with its voluntary export cuts of 500,000 barrels per day in August.
Overall, market conditions are influenced by a balance between U.S. demand concerns and China’s commitment to economic growth. The outcome of the Federal Reserve’s decision on interest rates and the success of China’s stimulus measures will continue to impact oil prices.
