Crude oil prices recovered some of their losses during a volatile trading session on Wednesday after crashing over 5 per cent previously.
The international benchmark, Brent crude, rose about 1 per cent to around $108 per barrel on supply worries after data showed a drop in oil inventories in the US and concerns of supply loss from Russia and Libya remained, driving recovery from the previous session’s sharp losses.
US crude futures gained 75 cents to a little over $103 a barrel.
But those contracts slipped over 5 per cent on Tuesday after the International Monetary Fund cut its global growth outlook sharply, citing the risks from the Russia-Ukraine war.
“Global economic prospects have been severely set back, largely because Russia invaded Ukraine. The most immediate priority is to end the war,” said the International Monetary Fund in its latest world economic outlook growth projections blog post.
“Compared to our January forecast, we have revised our projection for global growth downwards to 3.6 per cent in both 2022 and 2023. This reflects the direct impact of the war on Ukraine and sanctions on Russia, with both countries projected to experience steep contractions,” the IMF had added.
China’s COVID-zero approach and strict lockdowns have kept the demand prospects subdued and weighed on prices.
But Reuters reported that US crude stocks fell by 4.5 million barrels last week, according to market sources citing American Petroleum Institute figures on Tuesday.
And various other outages have added to supply worries. Indeed, OPEC member Libya has been forced to shut down many of its oil facilities because of political protests.