By Zhang Mengying
Investing.com – Oil was up on Wednesday morning in Asia, as investors shifted their focuses to supply tightness although recession worries mounted.
Brent oil futures rose 1.06% to $103.86 by 12:09 AM ET (4:09 AM GMT), after plunging 9.5% on Tuesday, the biggest daily drop since March. Crude oil WTI futures gained 0.42% to $99.92.
“Today is sort of a reset. No doubt there is short covering and bargain hunters are coming in,” said Again Capital LLC partner John Kilduff.
“The fundamental story regarding global tightness is still there ... The sell-off was definitely overdone,” Kilduff added.
The Organization of the Petroleum Exporting Countries (OPEC) Secretary-General Mohammad Barkindo said on Tuesday that the industry faces some problems due to years of under-investment, adding that supply tightness could be eased if extra supplies from Iran and Venezuela were allowed.
On the other hand, the Norwegian government on Tuesday intervened to end a strike in the petroleum sector that had cut oil and gas output. By Saturday, the strike would have cut daily gas exports by 1,117,000 barrels of oil equivalent (boe), 56% of daily gas exports, according to the Norwegian Oil and Gas (NOG) employers’ lobby.
Worries about a recession have also weighed on markets. According to some estimates, the U.S. may have shrunk in the three months from April through June.
U.S. crude supply data from the American Petroleum Institute will be released later in the day.