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Oil Up, Draw in U.S. Crude Oil Supplies Signal Tight Market
Published Mar 23, 2022 01:31AM ET
© Reuters
By Gina Lee
Investing.com – Oil was up on Wednesday morning in Asia, with a draw in U.S. crude inventories increasing concerns about tight global supplies amid the prospect of further sanctions on Russia.
Brent oil futures jumped1.2% to $116.87 by 1:29 AM ET (5:29 AM GMT) after falling 14 cents during the previous session. WTI futures rose 1.38% to $110.78 after losing 36 cents on Tuesday.
The prospect of further sanctions against Russia over its invasion of Ukraine on Feb. 24 is keeping markets on edge. U.S. President Joe Biden is likely to announce these sanctions when he meets with European leaders on Thursday in Brussels. Prices also dipped on Tuesday, with the European Union very unlikely to agree to a ban on Russian oil.
"We expect continued high volatility through the rest of the week, and especially around Thursday’s NATO summit," Vanda (NASDAQ:VNDA) Insights founder Vandana Hari told Reuters.
There may be some relief for the market if the EU drops the idea of a ban on Russian oil imports, “but supply worries will remain elevated as long as the Russia-Ukraine peace talks remain deadlocked," she added.
"The U.S. and Saudi Arabia are the two nations that can meaningfully offset the loss of Russia's oil. Extra supply from either seems unlikely right now but we are in a highly unusual situation and that makes everything more fluid," Commonwealth Bank analysts said in a note.
Tuesday’s crude oil supply data from the American Petroleum Institute showed a draw of 4.280 million barrels for the week ended Mar. 17. Forecasts prepared by Investing.com predicted a build of 25,000 barrels, while a 3.754-million-barrel build was recorded during the previous week.
Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.
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