The financial markets decided that a global trade war wasn’t quite upon us yet this morning. That let stocks and oil bounce back a tad.
But it also gave oil traders room to start worrying about oil supply again–after they spent Monday worrying that a global trade war would lead to a collapse in demand.
Supply worries focus on Russia–which exceeded the production limits the country had agreed to with OPEC in March. Russian production rose by 20,000 barrels a day to 10.97 million barrels a day. It was the first monthly increase since December and the highest production level in 11 months.
And to U.S. production where preliminary numbers argue that U.S. production exceeded projections in January.
On the plus side Russian Energy Minister Alexander Novak said today that the agreement capping production between members of OPEC and non-member producers such as Russia could be extended after the current agreement expires at the end of 2018.
U.S. benchmark West Texas Intermediate was up 0.70% to $63.45 a barrel as of noon New York time. International benchmark Brent was up 0.68% to $68.10 a barrel. The gains are good news for bullish oil traders but not especially robust given that oil prices hit a two-week low on Monday. On Monday, Brent, for example, closed down 2.5%.
