Oil swings as market assesses risk-off sentiment and lost output

Oil fluctuated as traders weighed a worsening global demand outlook against an accelerating decline in Russian production and a drop in U.S. crude stockpiles.

Oil fluctuated as traders weighed a worsening global demand outlook against an accelerating decline in Russian production and a drop in U.S. crude stockpiles.

West Texas Intermediate dropped to US$102 a barrel on Wednesday alongside a drop in broader equity markets. Russia pumped the equivalent of 10.11 million barrels a day of crude and condensate from April 1 to 19, a reduction of about 8.2 per cent from the March average. 

Meanwhile, Russia’s Rosneft PJSC surprised traders in Europe and Asia with offers to sell large amounts of crude at speed, as well as setting out significant changes to the payment process for at least some of the cargoes. 

Oil rallied to the highest level since 2008 last month in the aftermath of President Vladimir Putin’s invasion of Ukraine. Since then, crude has seen volatile trading as investors gauge moves by the U.S. and U.K. to ban Russian imports, as well as the impact of major releases from strategic reserves. 

Supply outages have also roiled prices, with protest-driven disruptions in Libyathe latest to hit the market. Meanwhile the industry-funded American Petroleum Institute reported that U.S. crude stockpiles declined by about 4.5 million barrels last week, according to people familiar with the data. If confirmed by government figures due Wednesday, that would be the biggest drop in nationwide holdings since early February.