Brent oil has reached $ 91 a barrel as Ukraine’s concerns continue Oil and gas news


Rising crude oil prices come as the global economy struggles with rising inflation.

from Bloomberg

Brent oil has reached a new seven-year high as a stable crude oil market opposes the US Federal Reserve’s indication that it will soon start raising interest rates to curb inflation.

Benchmark futures added nearly a dollar to trade at nearly $ 91 a barrel, while the West Texas Intermediate was also the highest since 2014. The recent rise in oil is coming as physical supplies appear to be extremely limited. Key swaps tied to the North Sea market, which helps the price of much of the world’s oil, are trading at their strongest levels since 2019, while market strength indicators, known as timepreads, are trading at its strongest level since November.

On Wednesday, the Fed approved raising interest rates in March and opened the door for more frequent, potentially larger increases than expected. Rising crude oil prices are coming as the global economy struggles with rampant inflation.

Oil rally

Traders are also following developments in Ukraine, fearing that Russia could launch an invasion after gathering thousands of troops at the border, potentially disrupting energy supplies. Moscow has said it plans to invade, but Citigroup Inc. said the growing volatility of crude oil was a sign that the market was pricing with an increased political risk premium, potentially at least $ 5 a barrel.

Oil rose in the first weeks of 2022 due to the continued recovery of energy consumption from the devastation of the coronavirus pandemic. As global demand grows stronger than expected and growing concerns about how much more producers will increase production, stocks at some key centers are declining at the beginning of the year.

“Developments in 2022 have been strictly upward with declining stocks so far this year compared to the normal seasonal trend of increasing stocks,” said Bjarne Schildrop, chief commodity analyst at SEB AB. “As long as the depletion continues in this way, the bull train will continue.”

Prices

  • Brent for March agreement rose 0.7% to $ 90.59 a barrel at 8:37 a.m. in New York
  • WTI with March delivery added 0.8% to $ 88.09 a barrel

Stocks at the key US storage center in Cushing fell again last week, reaching their lowest level of the year in a decade. At the same time, weekly consumption of petroleum products is at its highest level of the year of at least 30 years, due in part to a series of cold weather in the United States

The Organization of the Petroleum Exporting Countries and its allies, including Russia, will have a chance to judge next week when they meet on February 2nd. Delegates say the coalition is likely to support an increase of 400,000 barrels a day in March.

Related coverage:

  • The US physical raw material market is pricing close to its strongest level in more than a year and may become even stronger.
  • US gasoline futures have the highest premium of crude oil for this time of year since 2013, as refineries struggle to increase supplies before the summer.
  • Demand for propane in the United States remained close to a record last week, as winter weather invaded much of the country.





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