LONDON – Oil prices rose on Wednesday on supply concerns and a weaker dollar, but U.S. stockpile data capped gains.
Brent crude futures for December were up 54 cents, or 0.58%, at $94.06 a barrel by 1312 GMT. U.S. West Texas Intermediate (WTI) crude futures for December were up 80 cents, or 0.94%, at $86.12.
A weaker U.S. dollar sent a bullish signal, making oil cheaper for holders of other currencies.
Ongoing supply constraints added further support, with the International Energy Agency’s head highlighting the “first truly global energy crisis”.
Saudi Aramco’s CEO said there were many uncertainties ahead of planned European embargoes on crude and refined products from Russia, a member of the OPEC+ alliance led by Saudi Arabia, adding that Russian oil is still finding buyers.
Saudi energy minister Prince Abdulaziz bin Salman warned on Tuesday that energy stockpiles were being used as a mechanism to manipulate markets.
“OPEC production cuts effective November and the new EU sanctions on Russian oil to be enforced from December should be positive (for prices),” Stephen Innes, managing partner at SPI Asset Management, told Reuters.
But support for prices was capped on Wednesday by a 4.5 million barrel rise in U.S. crude inventories in the week ending Oct. 21, according to market sources citing figures from the American Petroleum Institute. This was above expectations from five analysts polled by Reuters.
Official U.S. stockpile data from the government’s Energy Information Administration is due at 1430 GMT.
Rising stockpiles reinforce fears of a global recession that would cut demand, weakness in which has also been apparent in softer Chinese crude import data.
Of the wide WTI-Brent spread in recent sessions, Innes added that WTI buyers are watching for more interventions by President Joe Biden ahead of the U.S. mid-term elections on Nov. 8.
Biden announced a plan last week to sell off the rest of a record release from the nation’s emergency oil reserve by the end of the year as he tries to keep gasoline prices in check.
Meanwhile Biden, facing criticism over high inflation, has warned that Saudi Arabia would face consequences for aligning with Russia and agreeing to reduce crude supply.
