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The
supply loss would be far greater than an expected drop in demand
of one million bpd triggered by higher fuel prices, the IEA said
in a report on Wednesday.
Benchmark Brent crude futures gained $4, or 4.1%, to $102.02 a
barrel by 0926 GMT. U.S. West Texas Intermediate (WTI) crude was
up $3.82, or 4%, to $98.86 a barrel.
Both contracts fell the previous day, following an unexpected
jump in U.S. crude stockpiles and signs of progress in
Russia-Ukraine peace talks.
Morgan Stanley raised its Brent price forecast by $20 for the
third quarter 2022 to $120 a barrel, predicting a fall in
Russian production of about 1 million bpd from April.
The fall will more than offset a downward global demand revision
of about 600,000 bpd, the bank said.
"Both supply and demand are hurting but supply is currently
hurting more and a tight oil market for the coming two quarters
is to be expected," bank SEB said.
Prices had sagged in the previous session on news that oil
inventories in the United States climbed by 4.3 million barrels
in the week to March 11 to 415.9 million barrels, according to
the U.S. Energy Information Administration. Analysts had
expected a fall of 1.4 million barrels.
The oil market largely shrugged off a decision by the U.S.
Federal Reserve on Wednesday to raise interest rates by
one-quarter of a percentage point, as anticipated.
Sentiment was somewhat boosted after China pledged policies to
boost financial markets and economic growth while a decline in
new COVID-19 cases in China spurred hopes lockdowns will be
lifted to allow factories to resume production.
(Additional reporting by Muyu Xu in Beijing; editing by Jason
Neely)
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