Oil prices stabilize as Russian supply fears meet Asian demand concerns

Workers walk as oil pumps are seen in the background at the Uzen oil and gas field in the Mangistau region of Kazakhstan November 13, 2021. REUTERS/Pavel Mikheyev

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  • Russia cuts gas supplies to Bulgaria and Poland on Wednesday
  • Oil shrugs off soaring US dollar
  • China to step up policy support for small businesses
  • API shows rise in rough stocks – market sources

April 27 (Reuters) – Oil was broadly stable on Wednesday after Russia cut gas supplies to Bulgaria and Poland, although lingering concerns over Asian coronavirus lockdowns weighed on economic growth and demand oil have held down prices.

After plunging into negative territory, Brent crude futures rose 26 cents, or 0.3%, to hit $105.25 a barrel at 0823 GMT. U.S. West Texas Intermediate crude futures gained 10 cents, or 0.1%, to $101.80 a barrel.

Oil prices shrugged off the dollar, hitting a two-year high, making oil purchases more expensive for holders of other currencies.

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Russian energy giant Gazprom (GAZP.MM) said on Wednesday it had cut off gas supplies to Bulgaria and Poland in a major escalation of Russia’s wider row with the West over his actions in Ukraine, which Moscow calls a “military operation”. Read more

The row sent NYMEX ultra-low sulfur diesel futures up more than 9% on Tuesday to $4.47 a gallon, a record close.

The International Monetary Fund (IMF) warned on Tuesday that Asia faces a “stagflationary” outlook with war in Ukraine, soaring commodity prices and a slowdown in China. Read more

China’s central bank said on Tuesday it would step up support for monetary policy as Beijing races to stamp out a nascent COVID-19 outbreak in the capital and avoid the same kind of debilitating citywide lockdown as Shanghai has been suffering for a month. Any stimulus would boost oil demand. Read more

“This bearish narrative is unlikely to last,” PVM analyst Stephen Brennock said of fears of a global economic slowdown following Chinese lockdowns.

“The fact is, the impact of lower Russian production has yet to be fully felt, and when it does, it could drive up oil prices.”

Domestic flight demand in China has rebounded, travel data firm OAG said. Read more

Data from the US government on oil inventories is due later Wednesday. Industry data showed on Tuesday that U.S. crude and distillate inventories rose last week while gasoline inventories fell.

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Additional reporting by Florence Tan in Singapore

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