Oil prices rose on Thursday as robust U.S. fuel consumption data and expected falls in Russian supply, later in the year, offset concerns that a possible recession in developed economies could undercut demand.
Brent crude futures climbed $1.27, or 1.4 per cent, to $94.92 a barrel by 1117 GMT.
U.S. crude futures gained 93 cents, or 1.1 per cent, to $89.04 a barrel.
Prices rose more than one per cent during the previous session, although Brent at one point fell to its lowest level since February, as signs of a slowdown mounted in some places.
British consumer price inflation topped 10 per cent in July, its highest since February 1982, intensifying a squeeze on households, while in China COVID-19 lockdowns and fuel export controls curbed demand.
Supporting prices, U.S. crude stocks fell by 7.1 million barrels in the week to Aug. 12, Energy Information Administration (EIA) data showed.
This is against expectations for a 275,000-barrel drop, as exports hit five million barrels per day (bpd), the highest on record.
Bans by the European Union on Russian exports could dramatically tighten supply when curbs to seaborne crude and products imports into the bloc ramp up in the coming months and drive up prices, analysts warn.
“The EU embargoes will force Russia to shut in around 1.6 million bpd of output by year-end, rising to two million bpd in 2023,’’ consultancy BCA research said in a note.
“EU embargoes on Russian oil imports will significantly tighten markets and lift Brent to $119 a barrel by year-end.’’
Russia, however, forecasts rising output and exports until the end of 2025, an Economy Ministry document reviewed by Reuters showed, saying that revenue from energy exports will rise 38 per cent this year, partly due to higher oil export volumes.
The market is also awaiting developments from talks to revive Iran’s 2015 nuclear deal with world powers, which could eventually lead to a boost in Iranian oil exports.
“We may be seeing traders taking a more cautious approach considering how close a decision on the Iran nuclear deal appears to be,’’ said Craig Erlam, senior market analyst at Oanda in London.
“There remains plenty of doubt that it will get over the line but if it does, that could be the catalyst for another move lower.