BEIJING- Oil prices ticked up in early Asian trading on Thursday, steadying from a sell-off the previous day after Saudi Arabia’s state oil company sharply raised March oil prices.
Brent crude futures rose 14 cents, or 0.19 percent, to $74.75 a barrel. US West Texas Intermediate crude was up 18 cents, or 0.25 percent, to $71.21 a barrel.
Saudi Aramco, the world’s leading oil exporter, on Wednesday announced it would sharply increase prices to buyers in Asia for March delivery amid rising demand from China and India as US sanctions disrupt Russian supply.
Aramco also increased the March price for shipments across all other regions, suggesting that “the new sanctions against Russia are starting to bite and the Saudis have been able to take advantage of a tighter market,” said Tony Sycamore, market analyst with IG.
The US last month imposed aggressive new sanctions on Russia’s oil trade, targeting the “shadow vessels” understood to be utilized to evade trade blockades.
“Additionally after the overnight sell-off and the Saudi news, there is likely to be some buying from traders covering shorts ahead of a strong band of support in the $70/68 region,” Sycamore said.
Oil prices had fallen more than 2 percent on Wednesday as a large build in US crude and gasoline stockpiles signaled weaker demand, and as investors weighed the implications of a new round of US China trade tariffs, including duties on energy products.
“While some tariff measures could put upward pressure on oil prices, the net impact will likely be bearish, given their potentially adverse effects on the global economy and Trump’s proven willingness to offer carve-outs for energy (to limit impacts to supply),” analysts from BMI said in a note.
