Oil Down After Three-day Rally

By Zhang Mengying

Investing.com – Oil was down on Wednesday morning in Asia after rising during the previous three sessions, but the concerns of global supply tightness capped the losses.

fell 0.86% to $112.81 by 11:22 PM ET (3:22 AM GMT) and fell 0.73% to $110.94.

The Group of Seven leaders reached an agreement to cap the prices of Russian oil, adding to concerns of a tighter supply.

“Investors made position adjustments but remained bullish on expectations that Saudi Arabia and the United Arab Emirates would not be able to raise output significantly to meet recovering demand, driven by a pick-up in jet fuels,” Nissan (OTC:) Securities general manager of research Hiroyuki Kikukawa told Reuters.

“Oil prices will likely stay above $110 a barrel, also on worries of potential supply disruptions due to hurricanes as the United States enters the summer,” he said.

Saudi Arabia and the UAE were considered the only two members of the Organization of the Petroleum Exporting Countries (OPEC) which have spare capacity to make up for lost Russian supply and weak output from other member nations.

However, UAE Energy Minister Suhail al-Mazrouei said on Monday the emirate was producing near the maximum capacity of its quota of 3.168 million barrels per day (bpd) under the agreement with OPEC and its allies, together called OPEC+.

Investors are worried that political unrest in Ecuador and Libya could also tighten supply.

Tuesday’s U.S. showed a draw of 3.8 million barrels for the week ended June 24.

The last week was delayed due to a system issue, the data for both weeks will be published together later in the day.

Source link

more recommended stories