WTI Crude Oil Continues to Make Gains, Supply Concerns in Focus
WTI crude oil prices are edging lower after soaring by as much as 1% early on Thursday over rising worries about possible disruption in crude supply even as concerns about weakening demand receded after China reported a continued slowdown in the number of infected cases from Hubei. At time time of writing, WTI crude oil is trading at around $53.58 per barrel.
The US has imposed further sanctions on the supply of crude oil from Venezuela even as rising tensions in Libya forced blockades of its ports and oilfields. These developments have markets worried about a potential tightening on the supply side of crude oil.
The ongoing blockade in Libya has reduced crude supply in global oil markets by as much as 1 million barrels per day, causing a total loss of around $1.6 billion so far. On the demand side as well, conditions have improved somewhat after China reported only 349 new cases of coronavirus from Hubei, the lowest number in over three weeks. The death toll has also slowed down to 108 from 132 on Wednesday.
In addition, crude oil prices continue to remain supported over prevailing expectations that OPEC and its allies could consider enforcing additional supply cuts at its upcoming meeting early next month to offset the reduced demand from China in the wake of the coronavirus outbreak. OPEC is scheduled to meet on March 6 at Vienna.
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