Apr 20, 2022 02:41AM ET
By: AnalysisWatch
Oil prices recovered on Wednesday after heavy declines in the previous session as worries about tighter supplies from Russia and Libya dominated, while industry data showed a drop in US crude inventories last week.
At 0623 GMT, Brent oil futures were up 66 cents, or 0.6 percent, at $107.91 a barrel, while WTI first-month futures, which are due to end on Wednesday, rose 46 cents, or 0.5 percent, to $103.02 a barrel. The second-month contract rose 64 cents to $102.69 a barrel.
Both benchmarks fell 5.2% in volatile trading on Tuesday after the International Monetary Fund (IMF) cut its global growth forecast by nearly a percentage point on Tuesday, pointing to the economic impact of Russia's war in Ukraine and warning that inflation was now a "clear and present danger" for many countries.
Global oil prices have been volatile, pulled up by the prospect of tighter supply as a result of sanctions imposed on Russia, the world's second-largest oil exporter and a key European supplier, following its invasion of Ukraine, which Moscow calls a "special operation".
However, the weaker global economic outlook and ongoing COVID-19 blockades in China, which are hurting demand in the world's largest crude importer, are weighing on prices.
On the supply side, the Organisation of the Petroleum Exporting Countries and its allies, known as OPEC+, produced 1.45 million barrels per day (bpd) below their output targets in March as Russian output began to fall following Western sanctions, according to a report by the producer alliance seen by Reuters.
The report showed that Russia's March output of 10.018 million barrels per day was about 300,000 barrels per day below its target, based on secondary sources.
According to market sources citing figures released by the American Petroleum Institute on Tuesday, crude oil inventories in the United States fell by 4.5 million barrels last week, while a rise was expected.