Oil prices have recovered after falling to their lowest level in months due to weak US demand.

Oil prices rose in early Asian trade on Thursday, rebounding from multi-month lows set the day before by data indicating weak US fuel demand. Brent crude futures were up 53 cents, or 0.6 percent, at $97.31 per barrel by 0020 GMT, while West Texas Intermediate (WTI) crude futures were up 55 cents, or 0.6 percent, at $91.21. In the previous session, both benchmarks fell to their lowest levels since February. The Energy Information Administration reported that US crude oil inventories increased unexpectedly last week as exports fell and refiners reduced runs, while gasoline stocks also increased unexpectedly as demand slowed.

On the supply side, OPEC ministers and allies including Russia, known as OPEC+, agreed to a small increase in the group’s output target, equal to about 0.1 percent of global oil demand. While the US has asked the group to increase output, spare capacity is limited, and Saudi Arabia may be hesitant to increase output at the expense of Russia, which is facing sanctions as a result of the Ukraine invasion, which Moscow refers to as a “special operation.”

OPEC+ reduced its forecast for the oil market surplus this year by 200,000 barrels per day (bpd) to 800,000 bpd ahead of the meeting, three delegates told Reuters. The Caspian Pipeline Consortium (CPC), which connects Kazakh oil fields with the Russian Black Sea port of Novorossiisk, bolstered prices by stating that supplies were significantly reduced without providing figures.

 

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