Oil falls as Russia diesel supply prospects counter Gulf supply risks
USO•Oil prices fell about 1.2% to 1.3% as traders weighed possible additional Russian diesel supplies against risks to Gulf energy infrastructure and shipping. OPEC cut its oil demand growth forecast for the year to 400,000 barrels per day from 1.4 million bpd.
1. Oil prices decline
Brent crude futures fell $1.30, or 1.2%, to $105.35 a barrel, while U.S. West Texas Intermediate crude futures dropped $1.25, or 1.3%, to $92.49. Both benchmarks had risen nearly $2 in the previous session.
2. Supply risks and demand
President Donald Trump said Russia had agreed to supply diesel to global markets, and his administration temporarily lifted U.S. sanctions on Russian fuel. The prospect of extra supplies offered some relief, but attacks on Saudi Arabia, reported tanker attacks near the Strait of Hormuz and concerns over Gulf shipping and energy infrastructure kept supply risks in focus. OPEC said shipping and insurance costs had risen to more than one-third of commodity value, while it lowered its oil demand growth forecast for the year to 400,000 bpd from 1.4 million bpd.
