Oil prices rose on Thursday after three consecutive sessions of losses, due to concerns about oversupply. The possibility of tightening sanctions on Russian crude also supported this rally. Brent and WTI both recovered from 16-week lows.
Brent crude futures rose 37 cents, or 0.57%, to $65.72 a barrel by 04:01 GMT. WTI rose 34 cents, or 0.55%, to $62.12 a barrel.
Some analysts attributed these gains to a technical recovery, with Brent and WTI closing at their lowest levels since June 5 and May 30, respectively, after both Brent and WTI fell about 1% in the previous session.
Buying came as WTI approached the $60 support level. Rising geopolitical risks and speculation about tighter sanctions on Russian crude also contributed to this situation.
G7 finance ministers said on Wednesday they would take steps to increase pressure on Russia by targeting those who continue to increase their purchases of Russian oil and those who facilitate sanctions evasion.
Some sources said the US would provide Ukraine with intelligence about long-range missile attacks on Russian energy infrastructure, confirming an earlier Wall Street Journal report.
Traders said that China, the world’s largest crude importer, has also maintained sufficient oil stockpiles, supporting oil prices and limiting the decline.
The US government shutdown has fueled concerns about the global economy.
The Trump administration on Wednesday froze $26 billion in funding for Democratic-leaning states, making good on its threat to use the government shutdown to target Democratic priorities.
On the supply side, expectations of higher production are influencing market sentiment, limiting price increases. Some sources indicated that OPEC+ could agree to increase oil production by up to 500,000 barrels per day in November, which would be three times the increase implemented in October due to Saudi Arabia’s efforts to regain market share.
The Energy Information Administration (EIA) said on Wednesday that U.S. crude oil, gasoline, and distillate inventories increased last week amid weakening refinery activity and weakening demand.
Crude oil inventories increased by 1.8 million barrels to 416.5 million barrels in the week ending September 26. This figure met analysts’ expectations for a 1 million barrel increase.