LONDON, July 6 (Reuters) – Oil prices were little changed on Thursday as markets digested tighter oil supplies along with fears of a global economic slowdown.
North Sea Brent crude futures climbed 29 cents to $76.94 a barrel by 0838 GMT, following a 0.5% gain on the previous day.
US West Texas Intermediate crude rose 37 cents to $72.16 after gaining 2.9% in post-holiday trading on Wednesday to catch up with the gains in Brent crude earlier in the week.
On the supply side, the largest oil exporters Saudi Arabia and Russia announced new production cuts for August. Total reductions now amount to more than 5 million barrels per day (bpd), equivalent to 5% of global crude oil production.
The production cut, along with a larger-than-expected drop in US crude inventories, provided some support for prices.
“Judging from the Fed’s minutes released last night, the oil balance is likely to tighten, and financial conditions will likely tighten as well,” PVM analyst Tamas Varga said.
“Holding recession fears will probably deter oil price spikes, but they will not.”
Markets expect interest rates in the US and Europe to rise further to curb persistently high inflation, while recent research showing slowing factory and service sector activity in China and Europe has Concerns about a global recession are growing.
Minutes released Wednesday showed the U.S. Unified Central Bank buying time to assess the need for another rate hike, even though most attendees expected further policy tightening would eventually be needed. Therefore, it was indicated that the June meeting agreed to keep interest rates unchanged.
Reporting by Natalie Glover, London Additional reporting by Yuka Obayashi, Tokyo and Jethlyn Lah, Singapore Edited by David Goodman
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