New throughout, updates prices, market activity and comments to settlement, adds Shanghai data
By Laura Sanicola
April 12 (Reuters) – Oil prices settled higher on Tuesday as lockdowns eased in Shanghai and as Russian oil and gas condensate production fell to 2020 lows and OPEC warned it would be impossible to replace potential supply losses from Russia.
Brent LCOc1 crude futures rose $6.16, or 6.3%, to settle at $104.64 a barrel by 1:48 p.m. EDT. U.S. West Texas Intermediate CLc1 rose $6.31, or 6.7%, to settle at $100.60. On Monday, both benchmarks fell about 4%.
Shanghai said more than 7,000 residential units had been classified as lower-risk areas after reporting no new infections for 14 days. Districts have been announcing which compounds can be opened up.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) warned it would be impossible to replace 7 million bpd of Russian oil and other liquids exports lost in the event of sanctions or voluntary actions. nL2N2W91CT
Russian oil and gas condensate production fell below 10 million barrels per day (bpd) on Monday to its lowest since July 2020, two sources familiar with data said on Tuesday, as sanctions and logistical constraints hampered trade. nL5N2WA409
Sources said Russia’s average oil output fell more than 6% to 10.32 million bpd on April 1-11 from 11.01 million in March.
The European Union has yet to embargo Russian oil, but some foreign ministers said the option is on the table.nL2N2W90H6
“The oil market is still vulnerable to a major shock if Russian energy is sanctioned, and that risk remains on the table,” wrote Edward Moya, a senior market analyst with OANDA.
OPEC on Tuesday lowered its Russian liquids production forecast by 530,000 bpd for 2022, but also cut its forecast for growth in world oil demand, citing the impact of Russia’s invasion of Ukraine, soaring crude prices and resurgence of the pandemic in China. nL5N2WA2ZW
Indian Oil Corp (IOC), which bought Russian Urals in previous tenders, has removed the grade from its latest crude tender. U.S. President Joe Biden told Indian Prime Minister Narendra Modi on Monday that buying more oil from Russia was not in India’s interest. nL2N2WA0LN
IEA member nations are planning to release 240 million barrels over the next six months from May in an effort to calm the market. nL2N2W628O
While the release will ease immediate tightness, analysts suggested it will not solve the structural deficit, and stocks will need to be replenished. nL2N2W628O
A preliminary Reuters poll showed U.S. crude oil inventories are likely to have risen by 1.4 million barrels in the week to April 8 after declining for three consecutive weeks. nL3N2W92VD
The poll was conducted ahead of a report from the American Petroleum Institute due at 4:30 p.m. EDT (2030 GMT) on Tuesday.
(Reporting by Laura Saniciola,
Additional reporting by Rowena Edwards in London, Mohi Narayan in New Delhi and Liz Hampton in Denver
Editing by David Goodman, Kirsten Donovan and David Gregorio)
This article originally appeared on reuters.com