By Ayenat Mersie
NEW YORK (Reuters) - Oil prices climbed surged on Wednesday, rebounding from a four-day slump as Russia's central bank expressed caution on plans to boost oil supply and analysts forecast a drawdown in U.S. crude inventories.
Oil has been pressured by reports that the Organization of the Petroleum Exporting Countries (OPEC) and Russia may ease up on output cuts in place since January 2017. The cuts have driven down global inventories and boosted prices, with global benchmark Brent reaching a 3-1/2-year high of $80.50 a barrel on May 17.
On May 25, sources told Reuters that Saudi Arabia and Russia are discussing raising oil output from OPEC and allied non-OPEC countries by around 1 million bpd.
On Wednesday, however, the Russian central bank said falling oil prices would pose a risk to the country's financial sector.
"It seems that somebody in the central bank is taking notice of the big drop in oil prices and sending a signal of, 'Hey, wait a second. We don’t want these prices to fall too far,'" said Phil Flynn, analyst at Price Futures Group in Chicago.
U.S. crude's discount to Brent
"There's more concern on the Brent side that supply losses from Iran are harder to be made up," Flynn said.
India's Reliance Industries Ltd
In Brazil, the FUP oil workers union said workers had joined the call for a nationwide strike on at least 20 oil rigs in the lucrative Campos basin and other areas of the country.
Protesters are calling for the resignation of Petroleo Brasileiro SA
Industry group American Petroleum Institute (API) releases its weekly supply report at 4:30 p.m. EDT (2030 GMT) on Wednesday, followed by official government data on Thursday. U.S. inventories are expected to decline by 525,000 barrels.
(Additional reporting by Alex Lawler, Roslan Khasawneh and Rania El Gamal; Editing by David Gregorio and Edmund Blair)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: May 31, 2018 02:05:16 IST