Oil rose after Ukrainian President Volodymyr Zelenskiy said his country would retaliate if Russia continues to block Ukrainian ports.
(Bloomberg) — Oil rose after Ukrainian President Volodymyr Zelenskiy said his country would retaliate if Russia continues to block Ukrainian ports.
Zelenskiy’s warning triggered fresh buying in the futures market as traders weighed the possibility of supply disruptions, sending US prices briefly above $83 barrel and to the highest close since April.
Supply concerns have largely driven oil’s rally since late June, which erased its losses for the year as the Organization of Petroleum Exporting Countries and its allies cut production. On Tuesday, cartel leader Saudi Arabia reaffirmed its commitment to voluntarily curb supplies next month.
Still, a weakening demand outlook is limiting the gains. The US Energy Information Administration on Tuesday lowered its forecast for US consumption. Reports from OPEC and the International Energy Agency coming later this week will offer further updates on the health of the market.
Read More: China’s Oil Imports Slip to Six-Month Low on Sluggish Recovery
Adding to bearish pressures, China’s trade plunged in July as slowing global demand clouded the outlook for exports, while the nation’s oil imports slipped to a six-month low. The dollar climbed and stocks fell as a ratings downgrade for 10 small and midsize US lenders exacerbated worries of renewed banking tumult.
Away from headline prices, Brent crude has weakened markedly versus other oil benchmarks in recent days. It’s now trading at a rare discount to Middle Eastern Dubai crude as OPEC+ output cuts lift the cost of heavier supplies, while its premium to WTI also has contracted to around the smallest since May.
To get Bloomberg’s Energy Daily newsletter direct into your inbox, click here.
–With assistance from Devika Krishna Kumar.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.