Oil prices edged upwards in early Asian trade on Thursday, as supply concerns and a looming rail stoppage in the United States, the world’s biggest crude consumer, supported markets.
Brent crude futures rose 38 cents, or 0.4 per cent, to $94.48 a barrel by 0013 GMT, while U.S. West Texas Intermediate crude rose 46 cents, or 0.5 per cent, to $88.94.
The dollar index slipped 0.14 per cent on Wednesday, dialing back the previous session’s gains, lifting demand for dollar-denominated commodities such as crude oil from holders of other currencies.
The International Energy Agency (IEA) said Wednesday it expects widespread switching from gas to oil for heating purposes, saying it will average 700,000 barrels per day (bpd) in October 2022 to March 2023 – double the level of a year ago. That, along with overall expectations for weak supply growth, also helped boost the market.
The increasing likelihood of a U.S. rail stoppage due to an ongoing labor dispute is also adding support to the market. Three unions are negotiating for a new contract that could affect rail shipments, which are important for crude and product deliveries.
TotalEnergies SE cut production at its 238,000 barrel-per-day (bpd) Port Arthur, Texas, refinery because of the planned shutdown of two sulfur recovery units (SRUs) on Wednesday, said sources familiar with plant operations.