Oil prices edged up today, even though both major benchmarks remain weighed down by fears of a drawn-out economic downturn and reduced demand worldwide.
Brent Crude and WTI Crude prices climbed 1.23 and 0.98 per cent respectively, ticking upwards following news that oil exports via the Druzhba pipeline to Europe had been suspended since early August.
General concerns over tight supplies have kept oil prices historically elevated, however there have been no further rallies on both major benchmarks, after Brent Crude slipped to $92.78 per barrel last Friday.
This is its lowest price since February, and follows the Bank of England’s warning on Thursday of a sustained recession, raising expectations of lower fuel use.
Earlier in the year, oil prices soared to 14-year highs as Russia’s invasion of Ukraine fed supply concerns – with Brent Crude hitting $139 per barrel.
Craig Erlam, senior market analyst at OANDA, does expect prices to rise again in the coming weeks – and is uncertain prices can be contained amid market volatility .
He said: “The question is how sustainable $90 oil is when the market remains very tight and OPEC+ is only willing to make small moves in order to address it. It’s comforting to know that Saudi Arabia and the UAE have spare capacity in case of emergency but I’m sure most would rather they actually use some of it considering many countries are facing a cost-of-living recession. ”
Meanwhile, the European Union put forward a “final” text to revive the 2015 Iran deal.
A senior EU official told news agency Reuters that a final decision on the proposal, which needs US and Iranian approval, was expected within “very, very few weeks”.
Talks have dragged on for months without a deal – but if the deal is revived, this could ease supply concerns.
Iran’s crude exports, according to tanker trackers, are at least 1m barrels per day below their rate in 2018 when then U.S. President Donald Trump exited the nuclear agreement.
This means an agreement could allow a sizeable boost in supply.