Oil recovers on falling US inventories, Libyan disruption

US Nymex futures went up 0.3% to $65.27 per barrel (pb) in early trade, from their last session, while international benchmark Brent crude futures rose 0.2% to $75.26 pb compared to their last settlement.

The American Petroleum Institute (API) reported a 3 million drop to 430.6 million barrels in the week ended 15 June. Moreover, a drop in Libyan supplies driven by the fall of an estimated 400,000-barrel storage tank also weighed on prices.

It is worth noting that Saudi Arabia, the de-facto leader of the Organization of Petroleum Exporting Countries (OPEC), and Russia are pushing to relax supply curbs introduced in 2017, while other OPEC members, including Iraq and Iran, are opposing the move.

“Supply quotas will be increased, but probably more in line with the smaller range being quoted [ from 300,000 to 600,000 barrels per day (bpd)] given the lack of consensus amongst OPEC members,” Cantor Fitzgerald Europe oil research analyst Jack Allardyce told Reuters.

In the same vein, markets are anxiously reacting to trade dispute between the US and China, as Beijing has threatened 25% tariffs on US imports, including crude oil, in response to Washington’s duties on Chinese imports, which would lead a steep drop-off in China’s purchases of American crude.

By 7:29 am GMT, US Nymex rose 0.78% to $65.58 pb, while global Brent jumped 0.92% to $75.77 pb.