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Oil was up on Thursday morning in Asia, with oil futures rising in early trading and recovering some of the prior day’s losses. Investors also digested the International Energy Agency (IEA)’s statement that a decline in oil demand due to higher prices would not offset a shut-in of Russian oil supplies.
Brent oil futures rose 1.73% to $99.72 by 12:30 AM ET (4:30 AM GMT) and WTI futures rose 1.75% to $96.70. Both Brent and WTI futures settled lower on Wednesday, thanks to an unexpected build in U.S. crude stockpiles as well as signs of progress in Russia and Ukraine peace talks.
However, the black liquid kicked off the session higher after a report from the IEA said some 3 million barrels per day of Russian oil output could be shut-in due to Western sanctions and as buyers avoid Russian exports. This would exceed the one million bpd drop in demand anticipated due to higher prices.
“Questions about how much Russian oil will continue to swing and uncertainty in how bad crude demand destruction will get will keep energy markets jittery,” OANDA senior market analyst Edward Moya said in a note.
The market largely ignored the U.S. Federal Reserve’s policy decision handed down on Wednesday. The central bank hiked its interest rate to 0.5%.
Meanwhile, Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration showed a build of 4.345 million barrels for the week ending Mar. 11. Forecasts prepared by Investing.com predicted a 1.3775-million-barrel draw, while a 1.863-million-barrel draw was recorded during the previous week.
Crude oil supply data from the American Petroleum Institute released the day before, showed a build of 3.754 million barrels.
