(MENAFN- Trend News Agency)
Oil prices rallied for a third day on Tuesday as major producers
Saudi Arabia and the United Arab Emirates looked unlikely to be
able to boost output significantly while political unrest in Libya
and Ecuador added to those supply concerns, Trend reports with reference
to Reuters .
U.S. West Texas Intermediate (WTI) crude futures rose $1.13, or
1%, to $110.7 a barrel at 0332 GMT, extending a 1.8% gain in the
previous session.
Brent crude futures advanced $1.26, or 1.1%, to $116.35 a
barrel, adding to a 1.7% rise in the previous session.
The UAE and Saudi Arabia have been seen as the only two
countries in the Organization of the Petroleum Exporting Countries
(OPEC) with spare capacity available to make up for lost Russian
supply and weak output from other member nations.
'A seam of tight supply news bolstered the market. Two major
producers, Saudi Arabia and the UAE, are said to be at, or very
close to, near‑term capacity limits,' Commonwealth Bank commodities
analyst Tobin Gorey said in a note.
UAE Energy Minister Suhail al-Mazrouei said on Monday UAE was
producing near maximum capacity based on its quota of 3.168 million
barrels per day (bpd) under the agreement with OPEC and its allies,
together called OPEC+.
His comments confirmed remarks by French President Emmanuel
Macron who told U.S. President Joe Biden on the sidelines of the
Group of Seven nations meeting that the UAE was producing at
maximum capacity and that Saudi Arabia could increase output by
only 150,000 bpd, well below its nameplate spare capacity of around
2 million bpd.
Analysts also warned political unrest in Ecuador and Libya could
tighten supply further.
Libya's National Oil Corp said on Monday it might have to
declare force majeure in the Gulf of Sirte area within the next
three days unless production and shipping resume at oil terminals
there.
Ecuador's Energy Ministry said the country could suspend oil
output completely within the next two days amid anti-government
protests. The former OPEC country was pumping around 520,000
barrels per day before the protests.
Those factors underscore shortages in the market, which have led
to a rebound this week, countering recession jitters that weighed
on prices over the previous two weeks.
But analysts from Haitong Futures said market sentiment remains
fragile with people waiting for clearer guidance for the next move
and geopolitical factors in focus.
Leaders of the G7 are discussing a potential price cap on
Russian oil that would hit President Vladimir Putin's war chest
while also lowering energy prices.
A French presidential official also called on global powers to
explore all options to alleviate a Russian squeeze on energy
supplies that has spiked prices, including talks with producing
nations like Iran and Venezuela.
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