Oil prices traded higher but in a narrow range on Thursday, after being rocked earlier in the week by supply losses from Libya and a worrying outlook for demand as the International Monetary Fund cut its global growth forecasts.
U.S. West Texas Intermediate (WTI) crude futures gained $1.48, or 1.44%, to 104.00 a barrel, adding to a 19 cent gain in the previous session.
Analysts said market volatility is likely to pick up again soon, with the European Union still weighing a ban on Russian oil for its invasion of Ukraine, which Moscow calls a “special military operation”.
“Oil, and energy markets generally, have plenty of big issues in a state of flux to stay quiet for long,” said Commonwealth Bank commodities analyst Tobin Gorey.
Libya, a member of OPEC, on Wednesday said the country was losing more than 550,000 barrels per day of oil output due to blockades at major fields and export terminals.
The demand outlook in China continues to weigh on the market, as the world’s biggest oil importer slowly eases strict COVID-19 curbs that have hit manufacturing activity and global supply chains.
The International Monetary Fund highlighted risks in China when it cut its forecast for global economic growth by nearly a full percentage point on Tuesday.
However the oil market remains tight with the Organization of the Petroleum Exporting Countries and allies led by Russia, together called OPEC+, struggling to meet their production targets and with U.S. crude stockpiles down sharply in the week ended April 15.
“There is not much incremental news overnight, with a trajectory from here really hinging on whether other nations join the UK/U.S. in banning Russian oil imports,” SPI Asset Management managing director Stephen Innes said in a note.
Eight weeks after Russia launched its invasion of Ukraine, European Union countries are evaluating ways to offset a potential ban on Russian oil, but no decisions have been made yet on a sixth package of sanctions.