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April 27 (Reuters) – Oil prices extended early Asian trade gains on Wednesday as geopolitical tensions simmered, with Russia warning of gas supply cuts to Poland and Bulgaria as Chinese economic stimulus hopes supported the oil demand outlook.
Brent crude futures rose $1.27, or 1.2%, to $106.26 a barrel at 0143 GMT. U.S. West Texas Intermediate crude futures rose $1.11, or 1.1%, to $102.81 a barrel.
Crude prices rose about 3% on Tuesday in volatile trading as the market was torn between supply and demand concerns over Russian oil and gas disruptions and a deteriorating global economic outlook.
The news sent NYMEX ultra-low sulfur diesel futures up more than 9% on Tuesday to settle at $4.47 a gallon, a record close.
“Oil is supported by escalating geopolitical tensions,” Stephen Innes of SPI Asset Management said in a note.
“The reduction in gas flows is not news, but now is the time for Russia to block gas flows as fears of stagflation are once again rampant.”
The International Monetary Fund (IMF) warned on Tuesday that Asia faces a “stagflationary” outlook with war in Ukraine, soaring commodity prices and a slowdown in China creating significant uncertainty. Read more
China’s central bank said on Tuesday it would step up cautious monetary policy support for its economy as Beijing races to stamp out a budding outbreak of COVID-19 in the capital and avoid the same debilitating nationwide lockdown. city that enveloped Shanghai for a month. Any stimulus would boost oil demand. Read more
Despite prolonged shutdowns in Asia’s biggest aviation market, demand for domestic flights in China has rebounded, pushing global airline capacity to its highest level in 2022 this week, the airline said on Tuesday. OAG travel data. Read more
In the bid, U.S. government crude inventory data is due later Wednesday. Industry data released on Tuesday showed U.S. crude and distillate inventories rose last week while gasoline inventories fell.
Reporting by Florence Tan in Singapore and Stephanie Kelly in New York; Editing by Richard Pullin and Christopher Cushing
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