OIL-Crude rises on supply fears after Russian pipeline shutdown


By Alex Lawler

LONDON, Aug 9 (Reuters) – Crude rose more than a dollar a barrel on Tuesday, reversing an earlier decline, after Russia said oil exports to Europe via the southern leg of the Druzhba pipeline had been suspended earlier in the month. August, reviving concerns about supply shortages.

* Russian pipeline monopoly Transneft said Ukraine had suspended oil flows through the pipeline’s southern leg because Western sanctions prevented a payment from Moscow for transit fees.

* “Not that we need it right now, but it’s another reminder of how tight the market is and how sensitive the price is to supply disruptions, especially from Russia,” said OANDA’s Craig Erlam.

* By 1113 GMT, Brent crude was up $1.42, or 1.5%, at $98.07 a barrel, after hitting $94.90. West Texas Intermediate in the United States (WTI) gained $1.01, or 1.1%, at $91.77.

* The Druzhba incident comes at a time when supply concerns had receded amid growing recession concerns. Earlier, oil was pressured by progress in talks to revive the nuclear deal with Iran, which would allow increased Iranian crude exports.

* Oil prices soared earlier in the year as the Russian invasion of Ukraine added to supply concerns, with Brent reaching $139 in March, near its all-time high.

* On Friday, Brent fell as low as $92.78, its lowest level since February, as the Bank of England’s warning of a prolonged slowdown intensified fears over slowing fuel use.

(Additional reporting by Sonali Paul and Emily Chow; Spanish editing by Carlos Serrano)




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