Saturday, August 13, 2022

Oil extends gains as major producers flag capacity limits

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Oil prices rallied for a third day on Tuesday as major producers Saudi Arabia and the United Arab Emirates looked unlikely to be able to boost output significantly while political unrest in Libya and Ecuador added to those supply concerns.

U.S. West Texas Intermediate (WTI) crude futures rose $1.13, or 1 per cent, to $110.7 a barrel at 0332 GMT, extending a 1.8 per cent gain in the previous session.

Brent crude futures advanced $1.26, or 1.1 per cent, to $116.35 a barrel, adding to a 1.7 per cent rise in the previous session.

The UAE and Saudi Arabia have been seen as the only two countries in the Organization of the Petroleum Exporting Countries (OPEC) with spare capacity available to make up for lost Russian supply and weak output from other member nations.

A seam of tight supply news bolstered the market.Two major producers, Saudi Arabia and the UAE, are said to be at, or very close to, nearterm capacity limits, Commonwealth Bank commodities analyst Tobin Gorey said in a note.

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