By Yuka Obayashi

TOKYO, Reuters – Oil prices rose Thursday after recovering from earlier losses. Longing worries over tight supplies outweighed concerns over slowing economic growth, highlighted by slumping global shares.

After falling more than 1 earlier in session, futures were 0.9% higher at $110.08/barrel at 0220 GMT.

U.S. West Texas Intermediate’s crude oil futures increased 42 cents or 0.4% to $110.01/barrel in June. The recovery from an earlier loss of more that $2 was impressive. WTI July crude oil futures rose 56c, or 0.5% to $107.60/barrel

The benchmarks prices both fell by 2.5% Wednesday.

Satoru Yashida, Rakuten Securities commodity analyst, stated that “a slump in Wall Street soured mood in early trade as this underlined concerns over weakening consume and fuel demand.” [MKTS/GLOB]

Wall Street sold off Asian stocks Thursday as Wall Street investors worried about global inflation, China’s zero-COVID policies and the Ukraine War. [MKTS/GLOB]

Yoshida stated that oil markets remain bullish despite the European Union’s pending ban on Russian crude imports. This is likely to tighten global supply.

This month, the European Union proposed new sanctions to Russia in response to its invasion of Ukraine. The measures would prohibit oil imports from Russia for six months, although they have yet to be adopted. Hungary is one of the strongest critics.

Wednesday’s announcement by the European Commission was a revelation of a budget for Europe totalling 210 billion Euro ($220 billion). This plan would see Europe eliminate its dependence on Russian fossil energy sources and use the move away from Moscow as a way to speed up its transition towards green energy.

Refiners also saw an unexpected drop in inventories last week as they increased output to meet tight product inventories. This has resulted in record-breaking gasoline and diesel prices. [EIA/S]

The capacity utilization on the East Coast as well as the Gulf Coast exceeded 95%. That puts those refineries at their most efficient running rates.

($1 = 0.9537 euros)