Oil prices rock on Russia’s supply worries, economic woes

An oil pump jack pumping oil in an oil field near Calgary, Alberta, Canada, July 21, 2014. REUTERS/Todd Korol/File Photo

LONDON (Reuters) – Crude oil fell on Wednesday as market demand worries linked to the risk of a looming recession were balanced by concerns that Russia could cut all oil and gas supplies. Prices fluctuated greatly.

Brent crude futures rose 2 cents (0.02%) at $92.85 a barrel at 1202 GMT, while US West Texas Intermediate crude rose 9 cents (0.1%) after a session low not seen since before Russia’s invasion of Ukraine. to $86.97.

Oil capped losses after Russian President Vladimir Putin threatened to cut off all oil and gas supplies if price caps were imposed on Russia’s energy resources.

The European Union has proposed limiting Russian gas just hours later, raising the risk of rationing in some of the world’s richest countries this winter.

Analysts already expect oil supplies to tighten in the final quarter of the year.

PVM analyst Steven Brennock said, “The suspension of US releases from the SPR (Strategic Petroleum Reserve), combined with the implementation of the EU embargo on Russian crude, is expected to reduce the global supply crisis this winter. It is the cause.

Expectations of tighter US oil inventories provided further support.

U.S. crude stockpiles are expected to fall for a fourth straight week, dropping an estimated 733,000 barrels in the week ending Sept. 2, a preliminary Reuters poll showed Tuesday.

The American Petroleum Institute’s weekly US inventories report will be released on Wednesday, a day later than usual because Monday is a holiday.

Markets are also adjusting bearish sentiment from the prospect of a global recession.

Credit rating agency Fitch said Tuesday that the shutdown of the NordStream 1 pipeline has increased the likelihood of a recession in the eurozone.

The European Central Bank is widely expected to raise interest rates significantly at its meeting on Thursday. The US Federal Reserve will follow him on Sept. 21.read more

Weak economic data from China amid a strict zero-COVID policy is also contributing to weak demand.read more

Customs data on Wednesday showed the country’s crude oil imports fell 9.4% in August from a year earlier.read more

Meanwhile, Britain’s new prime minister, Liz Truss, said Wednesday she would like to see more oil and gas drilling from the North Sea.read more

Reporting by Rowena Edwards Additional reporting by Isabel Kua from Singapore Editing by Jan Harvey and David Goodman

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