Crude oil prices rise in early trade

27 Apr 2023 , 09:18 AM

On Thursday, oil prices recovered, reversing some of the declines of yesterday, that were sparked by fears of a U.S. recession and higher Russian oil exports, which in turn lessened the impact of OPEC production curbs.

Brent crude was trading at $78.04 per barrel, up 35 cents or 0.45%. U.S. West Texas Intermediate crude was up 21 cents, or 0.28%, to $74.51 per barrel.

The increase comes as oil prices fell by about 4% on Wednesday, widening the previous session’s steep losses, as growing recession fears in the world’s largest economy eclipsed a data showing that U.S. crude stocks had decreased more than anticipated.

Key U.S.-manufactured capital goods’ new orders and shipments both decreased in March, which suggests that weak company spending on equipment likely restrained economic growth in the first quarter.

U.S. oil stockpiles decreased by 5.1 million barrels last week to reach 460.9 million barrels, well above experts’ average prediction of a 1.5 million decline in a Reuters poll, according to Energy Information Administration (EIA) data.

The consumption of cheaper Russian oil soared, and China is also increasing its purchases of Russia’s Urals oil, causing OPEC’s share of India’s oil imports to decline at the highest rate in 2022–2023 to the lowest in at least 22 years.

Despite Moscow’s commitment to reduce output, sources predict that oil loading from Russia’s western ports in April would be higher than it has been since 2019, exceeding 2.4 million barrels per day. Additionally, Moscow has increased its fuel exports to Latin America, Asia, Africa, and the Middle East.

For the first time since Russia invaded Ukraine, Chinese President Xi Jinping met with Volodymyr Zelenskiy on Wednesday. He pledged to send special delegates to the country and hold negotiations with all parties seeking peace.

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