Oil rises for a second day on supply tightness concerns

2022-07-26T06:25:52.000000Z

Shafaq News / Oil prices rose on Tuesday for a second day on increasing concerns about tightening European supply after Russia, a key oil and natural gas supplier to the region, cut gas supply through a major pipeline.

Brent crude futures for September settlement rose $1.51, or 1.4%, to $106.66 a barrel by 0339 GMT, extending a 1.9% gain in the previous day.

U.S. West Texas Intermediate (WTI) crude futures for September delivery increased $1.36, or 1.4%, to $98.04 a barrel, having gained 2.1% on Monday.

Russia tightened its gas squeeze on Europe on Monday as Gazprom said supplies through the Nord Stream 1 pipeline to Germany would drop to just 20% of capacity.

Russia's cut in supplies will leave countries unable to meet its goals to refill natural gas storage ahead of the winter demand period. Germany, Europe's biggest economy, faces potentially rationing gas to industry to keep its citizens warm during the winter months.

This could prompt end-users to swap their gas for oil products, particularly diesel. But this also carries risks since Russia supplies most of the region's diesel fuel and prices for drivers who depend on the fuel are expected to rise.

(Reuters)

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