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Oil prices find some support as Brent crude hits $78/barrel after initial losses

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Oil prices rose slightly on Thursday, finding some support after heavy losses in the previous two sessions driven by fears of a U.S. recession and an increase in Russian oil exports which dulled the impact of OPEC production cuts.

Brent crude was trading at $78.01 a barrel, up 32 cents, or 0.4 percent as of 0627 GMT, while U.S. West Texas Intermediate crude added 21 cents or 0.3 percent to trade at $74.51.

Oil prices dropped almost 4 percent on Wednesday, extending sharp losses from the previous session with recession fears overshadowing a bigger-than-expected fall in U.S. crude inventories.

As of Wednesday’s close, Brent is down 4.9 percent for the week while WTI has lost 4.6 percent.

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“Crude prices remain heavy following the plunge below the $80 level as too much demand destruction hit the U.S. economic outlook,” said Edward Moya, an analyst at OANDA, adding that the OPEC was right to cut output earlier this month.

“Oil is trying to find a floor and the only thing that could provide some support is technical buying,” Moya said.

New orders for key U.S.-manufactured capital goods fell more than expected in March and shipments declined, indicating that depressed business spending on equipment likely pulled back economic growth in the first quarter.

OPEC’s share of India’s oil imports fell at the fastest pace in 2022/23 to its lowest in at least 22 years as its intake of cheaper Russian oil surged, while China is also ramping up buying of Russia’s Urals oil.

Oil loading from Russia’s western ports in April will be the highest since 2019, above 2.4 million barrels per day, despite Moscow’s pledge to cut output.

(First published by Reuters)

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