Salem Radio Network News Friday, July 1, 2022

Business

Oil stable as tight supply counters falling U.S. markets

By Shadia Nasralla and Noah Browning

LONDON (Reuters) -Oil prices were little changed on Tuesday as bullish signals from a tight supply picture were countered by falling Wall Street equities and possible increase to U.S. interest rates, which could weigh on oil.

Brent crude futures were up 30 cents, or 0.4%, at $86.57 a barrel by 1425 GMT. U.S. West Texas Intermediate (WTI) crude futures were virtually flat with a gain of 3 cents to $83.34.

Global equities, which often move in tandem with oil, are set for their biggest monthly drop since the COVID-19 pandemic hit markets in March 2020. U.S. oil futures erased earlier gains as Wall Street opened, with equities falling. [MKTS/GLOB] [LIVE/]

However, both WTI and Brent hit seven-year highs last week and remain on track for monthly gains of more than 10%.

Indicating current tight supply, Brent’s six-month spread is in backwardation, with front-month delivery futures trading at a premium of about $5 a barrel.

Ahead of an expected U.S. Federal Reserve interest rate decision on Wednesday, which could dent crude prices, geopolitical risks involving oil and gas producer Russia have been supporting oil.

NATO on Monday said it was putting forces on standby and reinforcing eastern Europe with more ships and fighter jets in what Russia denounced as Western “hysteria” in response to its build-up of troops on the Ukraine border.

In the Middle East, Yemen’s Iran-aligned Houthi movement launched a missile attack on Monday on a United Arab Emirates base hosting the U.S. military. The attack was thwarted by U.S.-built Patriot interceptors, U.S. and Emirati officials said.

Also fuelling supply concerns is the difficulty encountered by OPEC+, which comprises the Organization of the Petroleum Exporting Countries (OPEC) along with Russia and other producers, with efforts to hit its targeted monthly output increase of 400,000 barrels per day.

Lower U.S. oil inventories are also providing support, with crude stocks at Cushing, Oklahoma, at their lowest for the time of year since 2012.

(Reporting by Shadia Nasralla and Noah BrowningAdditional reporting by Yuka ObayashiEditing by Louise Heavens and David Goodman)

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