Crude oil prices edged higher to the $46 per barrel mark on Wednesday, rising for the third day in a row, in anticipation of tightening of supply ahead. Global benchmark Brent futures moved in a narrow range between $45.86 per barrel and $46.10 per barrel, firming up after starting the day mildly stronger at $45.97 compared to their previous close of $45.86. While the shutting down of most of offshore output by US producers in the Gulf of Mexico ahead of Hurricane Laura supported the oil markets, gains were limited amid concern over the increasing COVID-19 cases around the globe.
At 1:31 pm, Brent futures traded 0.22 per cent higher at $45.96 per barrel, but WTI futures were down 0.07 per cent at $43.32 per barrel.
The Intercontinental Exchange (ICE)’s Brent futures are considered a benchmark for global oil markets, besides the New York Mercantile Exchange (Nymex)’s WTI crude futures.
“Supporting crude price is supply disruption in the Gulf of Mexico due to storm activity and API weekly report which noted a bigger than expected 4.52 million barrels decline in US crude stocks. However, weighing on price is mixed US economic data and rising virus cases,” said Ravindra Rao, VP-head commodity research at Kotak Securities.
“Crude may remain sideways to positive due to expectation of another decline in US crude stocks and supply disruption in the Gulf of Mexico,” he added.
At Tuesday’s close, Brent crude is down 30.52 per cent so far this year.
In April, the contract had hit a 21-year low of $15.98 per barrel as the coronavirus pandemic-induced lockdowns hampered global oil demand.
India is the world’s third largest importer and consumer of crude oil. (Also Read: India’s Crude Oil Imports Hit Over 5-Year Low In June)
