NEW YORK: Oil the prices stabilized slightly lower on Tuesday after a choppy session, with fears that a slowing economy could reduce demand rivaling news that some oil exports had been suspended on the Russia-Europe Druzhba pipeline which passes through Ukraine.
Raw the prices have been under pressure for weeks as fears mounted that a recession could reduce oil request.
Crude Brent LCOc1 settled at $96.31 a barrel, losing 34 cents, or 0.4%. US Crude West Texas Intermediate (WTI) CLc1 settled at $90.50 a barrel, losing 26 cents, or 0.3%. During the session, both benchmarks rose and fell more than $1 a barrel.
Ukraine arrested oil flows on the Druzhba oil pipeline to parts of central Europe because Western sanctions had prevented payment from Moscow for transit fees.
Flows along the southern route of the Druzhba gas pipeline were affected while the northern route serving Poland and Germany was not interrupted.
Oil initially moved higher on pipeline news and expectations that the shutdown would tighten supplies, but the prices course reversed as details became clearer around what caused the disturbance and that the flows should resume within days.
“Given the fact that it is not the Russian side that is shutting off the pipe, but the Ukrainian side, this seems like a situation that can be resolved as soon as possible,” said Bob Yawger, director of energy futures. at Mizuho in New York, in a note.
Prices have been pressured by talks of a last-ditch effort by European nations to revive the Iran nuclear deal. On Monday, the European Union presented a “definitive” text to revive the 2015 agreement . A senior EU official said a final decision on the proposal, which requires US and Iranian approval, was expected in “very, very few weeks”.
Talks have dragged on for months without a deal.
Iran’s crude oil exports, the tankers say, are at least 1 million barrels a day lower than their rate in 2018, when former US President Donald Trump quit the nuclear deal.
Oil is now down more than $40 from its peak following Russia’s invasion of Ukraine, which briefly took Brent to $139 a barrel.
American crude oil stocks were also signaling a slowdown in demand, according to market sources citing figures from the American Petroleum Institute. Crude inventories rose about 2.2 million barrels for the week ended Aug. 5. Analysts had forecast a small drop of 400,000 barrels in crude inventories. Official government data due Wednesday at 10:30 a.m. – Reuters