Druzhba pipeline accident boosts oil prices

Oil prices rose on Tuesday to a higher level after reports that oil supplies to Hungary via the Druzhba pipeline were temporarily halted due to a drop in pressure.

The International Energy Agency said Tuesday that the European Union's ban on Russian oil shipments by sea, which will take effect Dec. 5, requires compensation of 1.4 million barrels a day.

Phil Flynn, an analyst at Price Futures Group, said that if you pay attention to what the IEA said about global oil stocks, the situation is quite optimistic.

In addition, support for oil prices was provided by the fact that in October the growth of prices for products of U.S. oil refiners was less than forecasted, which indicates that the inflation rate is beginning to decline, and this may give reason for the Federal Reserve to slow down aggressive interest rate increases.

The IEA predicts that the gloomy economic outlook will trigger a decline in global oil consumption by nearly a quarter of a million bpd in the fourth quarter of 2022 on an annualized basis, with demand growth slowing to 1.6 million bpd in 2023 from 2.1 million bpd this year.

U.S. government data on oil inventories will be released Wednesday.