Oil rises as supply uncertainty increases

Keep on oil Its gains on Tuesday, with the continued closure of a major oil pipeline carrying resources to united statewhich raises concerns about Possible shortage of supplies into the world’s largest oil consumer.

Brent crude futures were up $1.16, or 1.5%, to $79.15 a barrel by 05:25 GMT, while US West Texas Intermediate crude futures were up $1.05 , or 1.4%, to $74.22.

Both benchmarks were up more than 2% when they adjusted in the previous session.

“Crude rose after supply issues outweighed concerns about weak demand,” Brian Martin and Daniel Haynes, analysts at ANZ Research, said in a note to clients on Tuesday.

Concerns about Russian oil production have surfaced after Russian President Vladimir Putin said on Friday that Russia could cut production.

The closure of TC Energy’s Keystone pipeline, through which approximately 620,000 barrels per day of Canadian crude is shipped from Alberta to the United States, has reduced supplies and increased the possibility of an inventory draw at its storage hub in Cushing, Oklahoma.

Oil prices also got some support from expectations that easing COVID-19 restrictions in China, the world’s second largest oil consumer, will boost demand.

China has lifted some of its tough coronavirus restrictions in the past week, including easing COVID-19 testing requirements and stopping tracking people’s travel logs for virus-related purposes.

“The lifting of restrictions will facilitate the recovery of demand for domestic transportation and travel,” analysts at Haitong Futures said.

But they also warned that surging coronavirus cases in major Chinese cities were still dominating market sentiment and that clearer signs of a demand recovery were needed to provide solid support to oil prices.

(Reuters, The New Arab)