TOKYO – Oil prices rose on Thursday, recovering from initial losses as global stock prices plunged over fears of slower economic growth.
Brent crude futures for July rose 97 cents, or 0.9%, to 110 110.08 a barrel at 0220 GMT, after falling more than $ 1 before the session.
US West Texas Intermediate (WTI) crude futures for June rose 42 cents, or 0.4%, to $ 110.01 a barrel, recovering from an initial loss of more than $ 2. The WTI for July was up 56 cents, or 0.5%, at 7 107.60 a barrel.
Prices on both benchmarks fell about 2.5% on Wednesday.
Satoru Yoshida, a commodities analyst at Rakuten Securities, said:
Asian stocks sought a steep Wall Street sell-off on Thursday as investors were upset over rising global inflation, China’s zero-cue policy and the war in Ukraine.
“Nevertheless, oil markets are maintaining a bullish trend as the European Union’s pending import embargo on Russian crude oil is expected to further strengthen global supply,” Yoshida said.
The European Union has proposed a new package of sanctions against Russia over its attack on Ukraine this month. This would include a complete ban on oil imports within six months, but measures have not yet been taken, with Hungary being one of the most vocal critics of the plan.
The European Commission on Wednesday unveiled a 210 billion euro ($ 220 billion) plan for Europe to use its pivot away from Moscow by 2027 to end its dependence on Russian fossil fuels and speed up its transition to green energy.
Also, U.S. crude inventories fell last week, an unexpected drawdown, as refiners increased output in response to tight product lists and near-record exports that pushed U.S. diesel and gasoline prices to record levels.
Capacity utilization was above 95% in both the East Coast and the Gulf Coast, keeping these refineries close to their highest possible running rates.
(1 = 0.9537 euros) (Reporting by Yuka Obayashi; Editing by Tom Hogg)