Oil prices rise as supply uncertainty increases

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An IPC Petroleum France oil pump is seen at sunset outside Soudron, near Reims, France, Aug. 24, 2022. REUTERS/Pascal Rossignol/File Photo

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LONDON, Sept. 12 (Reuters) – Oil prices rose Monday as Iran’s nuclear talks appeared to hit hurdles and an embargo on Russian oil supplies loomed, with tight supply struggling to meet still robust demand.

Brent oil futures were up 92 cents, or 1%, to $93.76 a barrel at 0910 GMT. US West Texas Intermediate crude rose 71 cents to $87.50 a barrel, or 0.8%.

Prices have changed little last week as gains from a nominal supply cut by the Organization of the Petroleum Exporting Countries and allies, including Russia, a group known as OPEC+, were offset by lockdowns in China, the world’s largest importer of crude oil.

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France, Britain and Germany said on Saturday they had “serious doubts” about Iran’s intentions to revive a nuclear deal, in a development that could keep Iranian oil off the market and squeeze global supplies. could keep. read more

Global oil prices may pick up again towards the end of the year, as supply is expected to tighten further when a European Union embargo on Russian oil comes into effect on December 5.

The G7 will introduce a price cap on Russian oil to limit Russia’s lucrative earnings from oil exports after its February invasion of Ukraine, and plans to take measures to ensure oil can still flow to emerging countries . read more

In more bearish news for the markets, Chinese oil demand could contract this year for the first time in two decades, as Beijing’s zero-COVID policy keeps people at home during holidays and cuts fuel consumption. read more

“The continued presence of headwinds from China’s renewed virus restrictions and further moderation in global economic activity may still raise some concerns about a more sustained gain,” said Jun Rong Yeap, market strategist at IG.

Also, the European Central Bank and the Federal Reserve are willing to raise interest rates further to tackle inflation, which could increase the value of the US dollar against currencies and make dollar-denominated oil more expensive for investors.

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Additional reporting by Florence Tan and Jeslyn Lerh; Editing by Kenneth Maxwell and Louise Heavens

Our standards: The Thomson Reuters Trust Principles.

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