Oil dips in choppy trade as supply recovery counters Russia cut

Oil edged down in an erratic trading session as the return of oil exports out of Turkey allayed immediate concerns over a looming reduction in Russian supply.

West Texas Intermediate futures briefly mustered a rally to erase a drop of 1.6 per cent before succumbing under the weight of returning volumes. Loadings of Azeri crude at the Turkish port of Ceyhan resumed Sunday, ending a major supply disruption following last week’s devastating earthquake.

On Friday, Russia announced it would slash its output by half a million barrels a day. The decision led to a significant uptick in bullishness in the options market, while firming up timespreads. The European Union said Russia was forced into the cut as sanctions have restricted Moscow’s ability to find buyers.