Oil Prices Bounce Back From Tuesday Tumble As Supply Concerns Return

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Oil prices rose as much as nearly 3% before paring some gains as investors piled back into the market after a heavy rout in the previous session; with supply concerns returning to the fore even as worries about a global recession linger. Brent crude futures rose as much as $3.08, or 2.9%, to $105.85 a barrel in early trade. However, after plunging 9.5%, the biggest daily drop since March. It was last up 92 cents, or 0.9%, at $103.69 a barrel at 0243 GMT.

U.S. West Texas Intermediate crude climbed to a session high of $102.14 a barrel, up $2.64, or 2.7%, after closing below $100 for the first time since late April. It was last up 46 cents, or 0.5%, at $99.96 a barrel.

OPEC Secretary General Mohammad Barkindo said that the industry was “under siege” due to years of under-investment. However, adding shortages could be eased if extra supplies from Iran and Venezuela were allowed.

Russia’s former president Dmitry Medvedev also warned that a reported proposal from Japan to cap the price of Russian oil; at around half its current level would lead to significantly less oil in the market and push prices above $300-$400 a barrel.

By Saturday, the strike would have cut daily gas exports by 1,117,000 barrels of oil equivalent (boe) or 56% of daily gas exports; while 341,000 of barrels of oil would have been lost, the Norwegian Oil and Gas (NOG) employers’ lobby said.

-Reuters.

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