Title: Oil Up on Supply Concerns after Declining During Previous Two Sessions

Jul 07, 2022 01:05AM ET

By: AnalysisWatch

Oil prices rose in Asia on Thursday morning on supply concerns after falling in the previous two sessions.

At 1:05 a.m. ET, Brent oil futures rose 0.51% to $101.20, while WTI crude futures rose 0.56% to $99.11.

Both benchmarks closed Wednesday at their lowest levels since April 11. The declines followed a dramatic drop on Tuesday despite tight global supplies.

"Oil prices are being decimated with no new information on production or consumption," said Stephen Innes, managing partner at SPI Asset Management.

"With commodity traders very risk averse due to rising demand and still restrictive Federal Reserve policies, the risk of a recession weighs on the market like an anvil."

Oil prices have fallen along with other commodities such as metals and palm oil as global central banks raised interest rates, stoking fears of a recession that could dampen demand for commodities.

"It appears the market is starting to price in that scenario," Warren Patterson, head of commodity research at ING, told Reuters, referring to the recession.

On the supply side, investors are evaluating possible oil supply disruptions from the Caspian Pipeline Consortium (CPC), which was ordered by a Russian court to suspend operations for 30 days. Exports from the CPC, which handles about 1% of global oil shipments, were still running Wednesday morning.

Crude supply data released Wednesday by the American Petroleum Institute showed a decline of 3.825 million barrels.

Investors are now waiting for U.S. crude oil supply data from the U.S. Energy Information Administration, which will be released later today.