Oil edged higher amid signs that Russia is making good on its pledge to curb supplies to international markets.
(Bloomberg) — Oil edged higher amid signs that Russia is making good on its pledge to curb supplies to international markets.
West Texas Intermediate traded above $74 a barrel, after dropping in the previous two sessions on concerns about China’s economy and the return of a major Libyan oil field.
Russia’s seaborne crude flows sank to a six-month low in the latest four-week period, data compiled by Bloomberg show. Meanwhile, Moscow aims to reduce its third-quarter crude export plans by 2.1 million tons, in line with its previously-stated pledge to cut overseas shipments by 500,000 barrels a day.
With Russian oil becoming more expensive, buyers like India are now considering boosting purchases from traditional sources in the Middle East instead.
To be sure, the market remains focused on the outlook for consumption, and crude prices are still down for the year. Doubts over China’s economic recovery in recent days halted a rally that started in late June, driven by signs the market is tightening following production cutbacks by OPEC+ heavyweights Saudi Arabia and Russia.
“Data from China showing weaker than expected economic growth has dispelled the illusion of a near-term demand recovery in the world’s second largest oil consumer,” analysts at Alfa Energy said in a note.
Several Wall Street banks have slashed their Chinese growth forecasts, and Treasury Secretary Janet Yellen warned of the risk of global ripple effects.
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