(LONDON) Oil prices rebounded on Wednesday, after two sessions of decline, boosted by fears over tight crude oil supply, neutralizing demand concerns for the time being.
Around 5:30 a.m., a barrel of Brent from the North Sea for delivery in July took 2.99% to 105.52 dollars.
A barrel of US West Texas Intermediate (WTI) for June delivery rose 3.05% to $102.80.
“The market is trying to gauge the opposing” pressures on oil prices, says Victoria Scholar, analyst for Interactive Investor.
On the one hand, “containments in China, the strengthening of the US dollar and the growing risk of a global recession, compared to the consequences of the war in Ukraine” are pulling prices down, lists the analyst.
A strong dollar indeed weighs on the price of crude, since it weakens the purchasing power of investors using other currencies.
On the other side, these bearish factors collide “with the consequences of the war in Ukraine, in particular the prospect of a ban on Russian oil by the European Union and the restrictive effect this would have on the availability” of hydrocarbons. , pushing prices up, Scholar continues.
The EU is struggling to agree on a full embargo on Russian oil. The project is notably blocked by Budapest.
“Efforts are hampered by internal disagreements. The proposal must be unanimously supported by all 27 EU countries, but members who are heavily dependent on Russian energy are not playing the game,” said Stephen Brennock, analyst at PVM Energy.
Fears over the reliability of Russian hydrocarbon supplies have resumed with renewed vigor, with the volume of Russian gas transiting through Ukraine appearing to be down on Wednesday, as fighting in the east of the country with the Russian army prevent, according to Kyiv, the proper functioning of gas infrastructures.
“Inflation data for April and weekly figures from the U.S. Energy Information Agency (EIA) for commercial crude inventories from the U.S., the world’s largest consumer, will also be the focus of the report. ‘investor attention,’ notes Stephen Brennock.
For the past week, analysts expect crude inventories to have fallen by 1.45 million barrels, according to the median of a consensus compiled by Bloomberg.