On Thursday, crude prices increased by about one percent after reducing to a seven-month dip in the previous session. A group of technical traders reportedly bought the dip and Russia added on the pressure by threatening to pause oil and gas exports to a number of buyers.
The one percent increase came even though a surprise build in the US arrived in US crude inventories.
The United States was weighing up the cost of more crude releases from strategic reserves and concerns China’s COVID-19 lockdown extensions and raising global interest rates.
China’s Covid lockdown extensions and increasing global interest rates are thought to slow economic activity and hit fuel demand.
According to Energy Information and Administration: “Last week, US crude stockpiles skyrocketed by almost 9 million barrels because of a combination of increased imports, ongoing releases from Government emergency reserves.”
The bulky build compares with the 250,000 – barrel draw which was forecasted in a Reuters poll alongside data from American Petroleum Institute group which shows a barrel increase of 3.6 million.
Phil Flynn, an analyst from Price Futures Group said: “Most of that oil in that build came from the Strategic Petroleum reserve.
“The quicker we empty out the SPR, the larger the draws are going to be in the future.”
Meanwhile, US Energy Secretary Jennifer Granholm, notes that Joe Binden’s administration was considering the need for further releases of crude oil from national emergency stockpiles.
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Prices were also supported by Putin’s threats to suspend oil and gas exports if European buyers implement price caps.
The European Union suggested capping Russian gas prices which would increase the likelihood of rationing this winter if Moscow continues with its threat to halt exports.
Gazprom has already suspended exports from the Nord Stream 1 gas pipeline and Belgium’s energy minister suggested a cap on wholesale gas prices instead of just on Russian imports.