Oil prices edged up in volatile trade on Monday, as Russia halted exports to Poland via a key pipeline ahead of a hefty supply cut announced for March, but a stronger dollar and fears of recession capped gains.
West Texas Intermediate U.S. crude futures (WTI) traded at US$76.68 a barrel, 36 cents, or 0.5% higher, while Brent crude futures were up 34 cents, or 0.4%, at US$83.50 a barrel at 0950 GMT.
Both benchmarks closed more than 90 cents higher on Friday.
Russia halted supplies of oil to Poland via the Druzhba pipeline, the chief executive of Polish refiner PKN Orlen said on Saturday, a day after Poland delivered its first Leopard tanks to Ukraine.
Russian oil pipeline monopoly Transneft attributed the shut-off to lack of completed paperwork for supplies in the second half of February.
Russia announced plans earlier this month to cut oil exports from its western ports by up to 25% in March versus February, exceeding its previously mooted production cuts of 5%.
“Crude continues to take direction from the sentiment in the broader financial markets,” said Vandana Hari, founder of oil market analysis provider Vanda Insights. “If risk-aversion continues to grow, crude will likely come under renewed pressure.”
Adding to downside pressure, U.S. crude oil inventories surged to the highest level since May 2021 last week, data from the Energy Information Administration (EIA) showed.
Separately, investors are bracing for China’s manufacturing surveys this week for a clear direction on oil demand. China is holding its annual parliamentary meeting from this weekend and will see new economic policy targets and policies.