Oil rallies on supply fears and tight market – The National

Oil rallies on supply fears and tight market – The National

Oil prices rallied by about 5 per cent overnight, extending their gains from early trading on Monday following US President Joe Biden’s visit to the Middle East and amid tight market conditions as well as reports that Russia's Gazprom informed some European customers that it cannot guarantee gas supplies, leading to a knock-on effect on crude prices.

Brent, the benchmark for two thirds of the world's oil, was trading 0.36 per cent at $106.70 at 11.21am UAE time on Tuesday. West Texas Intermediate, the gauge that tracks US crude, was up 0.48 per cent to $103.10 a barrel.

The rise in prices came after Saudi Arabia said any decision on boosting production would need to take place within the framework of the Opec+ alliance and that it would not have any additional production capacity beyond the 13 million barrels per day it is aiming for by 2027.