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Picture: REUTERS
Picture: REUTERS

London/Singapore — Oil prices gained for a fourth straight session on Wednesday with tight supply worries offsetting concerns about a weaker global economy.

Brent crude futures for August were little changed at $117.9 a barrel by 9.17 GMT. The August contract will expire on Thursday and the more-active September contract was at $114.06, up 23c, or 0.2%.

US West Texas Intermediate (WTI) crude futures were up 44c, or 0.4%, to $112.20 a barrel.

Both contracts rose more than 2% on Tuesday as concerns over tight supplies due to Western sanctions on Russia outweighed fears of that demand may slow in a potential future recession.

“The market is stuck in the push-pull between the current deteriorating macro backdrop and the looming threat of a recession, pitted against the strongest fundamental oil market set-up in decades, maybe ever,” RBC Capital's Mike Tran said in a note.

Saudi Arabia and the United Arab Emirates have been seen as the only two members of Opec with spare capacity to make up for lost Russian supply.

French President Emmanuel Macron said this week he was told that those producers would struggle to increase output further.

“Investors made position adjustments, but remained bullish on expectations that Saudi Arabia and the United Arab Emirates would not be able to raise output significantly to meet recovering demand, driven by a pickup in jet fuels,” said Hiroyuki Kikukawa, GM of research at Nissan Securities.

Opec and Opec+, which includes allies such as Russia, began a series of two-day meetings on Wednesday with sources saying chances of a big policy change looked unlikely in June.

“Oil prices will likely stay above $110 a barrel, also on worries of potential supply disruptions due to hurricanes as the US enters the summer,” he said.

Analysts also warned that political unrest in Ecuador and Libya could tighten supply further. 

Reuters

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