April West Texas Intermediate crude oil futures edged lower on Thursday but were then pushed higher on Friday morning by a surprise announcement that Russia would cut production in March.
The catalysts behind the selling pressure on Thursday were an easing of the supply destruction premium after oil infrastructure appeared to have avoided serious damage from the earthquake that devastated parts of Turkey and Syria, growing U.S. Inventories, and worries about Federal Reserve rate hikes.
Nonetheless, the market remained supported by optimism over the expected demand recovery in China.
No Serious Damage to Turkey/Syria Oil Infrastructure
The earthquake, which has killed more than 19,000 people, initially sent oil prices higher on the prospect that the disaster would seriously damage pipelines and other infrastructure and displace crude from the global market for an extended period, according to Reuters.
Additionally, BP Azerbaijan declared force majeure on Azeri crude shipments from the Turkish port of Ceyhan on Tuesday after the quake struck early on Monday. Azeri oil continues to flow there via pipeline, BP Azerbaijan said on Thursday, and Reuters reported.
Potentially Bullish Factors to Watch
April WTI crude oil could be underpinned over the near-term on demand hopes fueled by China’s recovery and a weaker U.S. Dollar.
Powell’s Less-Hawkish Tone Weakens Dollar
WTI crude was supported earlier in the week after…