May 29, 2023

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Oil prices rose after recession fears and losses from Russian exports

Oil suffered a sharp loss of 4% in Wednesday’s session

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Oil prices rose on Thursday, reversing earlier losses fueled by fears of a U.S. recession and rising Russian oil exports, which offset the impact of OPEC production cuts.

By 05:34 GMT, Brent crude was up 32 cents, or 0.41%, at $78.01 a barrel. US West Texas Intermediate crude was also up 20 cents, or 0.27%, at $74.50 a barrel.

On Wednesday, oil prices fell around 4% to extend heavy losses from the previous session, hiding a report showing a decline after growing fears of a recession in the US, the world’s largest economy. US crude is higher than expected.

New orders for key US-made goods fell more than expected in March and exports fell, as lower business spending on equipment dampened economic growth in the first quarter.

U.S. Energy Information Administration data showed U.S. crude inventories fell 5.1 million barrels last week to 460.9 million barrels, beating the average forecast of a 1.5 million barrel drop by analysts in a Reuters poll.

OPEC’s share of India’s oil imports rose at the fastest rate in 2022-2023 with low-priced Russian oil at its lowest in at least 22 years, while China also ramps up purchases of Russia’s Urals crude.

Oil loadings from Russian western ports in April are expected to be the highest since 2019, sources said, despite Moscow’s pledge to cut output. Moscow has also increased fuel supplies to Turkey, Asia, Africa, the Middle East and Latin America.

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