TH: Oil price recovery is capped ahead of reserves data
The oil price has regained some ground today, but a relief rally is being capped by speculation that oil reserves data due to be published this afternoon will add to the bearish picture on supply.
US benchmark West Texas Intermediate has fallen well below $50 a barrel of late, while international benchmark Brent Crude was testing support around this level yesterday.
Both have been under pressure as data continues to show that global reserves of crude oil are growing despite the agreement between Opec, Russia and others to cut 1.8 million barrels per day from output.
Lined up against this is an underwhelming growth in demand, a comparatively modest impact on exports from countries subject to the deal and, most critically, a surge in drilling activity in the US shale sector.
Against this backdrop, the news yesterday that armed factions in Libya have disrupted supply at the Sharara and Wafa oil fields has prompted a wave of buying.
Supply from Libya has fallen by a third, or 252,000 barrels, says
