Brent remains above $100 as supplies struggle, bearish fears

Oil prices were stable on Thursday after heavy losses in the past two sessions, as investors turned their attention back to tight supplies despite fears of a global slowdown.

Brent crude futures rose 14 cents, or 0.1 per cent, to $100.83 a barrel by 0900 GMT. WTI crude futures rose 21 cents, or 0.2 pc, to $98.74 a barrel.

The price fluctuated between a loss of around $2 and a gain of around $1 in a volatile trade.

Warren Patterson, ING’s head of commodity research, said: “The fears of a recession continue to grow and this obviously raises some concerns for the demand outlook.”

“However, supportive fundamentals should mean that further downside is relatively limited.”

He added that it is difficult to be highly bearish on oil prices as Brent monthly spreads remain largely in the laggard, referring to higher trading in early-month prices compared to future months.

“Recent Iranian nuclear talks haven’t achieved much”, Patterson said, after Washington tightened sanctions on Iran on Wednesday, putting pressure on Tehran as it seeks to revive the 2015 Iran nuclear deal.

Oil prices in recent weeks have fallFueling the fears of a sharp economic slowdown and a hit to the demand for goods.

Brent and WTI on Wednesday closed at their lowest level since April 11. The decline came after a dramatic fall on Tuesday when WTI fell 8 pc, while Brent fell 9 pc – a drop of $10.73 which was the third biggest drop for the contract since it began trading in 1988.

“If the forecasted slowdown is not severe, crude oil prices should remain in the range of $100 per barrel for the next 2-3 years,” said Feridun Fesherki of consultancy FGE.

Traders are eyeing potential oil supply disruptions at the Caspian Pipeline Consortium (CPC), which has been asked by a Russian court to suspend activity for 30 days. Exports in the CPC, which handles about 1 per cent of the global oil supply, were up till Wednesday morning.