Oil prices rose above $110 a barrel in Wednesday’s session as investor concerns mounted over potential supply disruptions from an escalating Russian-Ukrainian war.
OPEC+, made up of the Organization of the Petroleum Exporting Countries and its allies including Russia, offered no surprises at its monthly meeting, quickly agreeing to increase production in April by an additional 400,000 barrels per year. day.
April CL.1 West Texas Intermediate Crude Futures,
rose $4.16, or 4%, to $107.57 a barrel on the New York Mercantile Exchange. First-month contract prices are on track for their highest level since September 2013. Prices hit an intraday high of $112.51, the highest since May 2011.
May Brent crude BRNK22,
the global benchmark, jumped $4.53, or 4.3%, to $109.50 a barrel after an intraday high of $113.94. He is on course for the highest settlement since July 2014.
Avril natural gas NGJ22,
rose 2.7% to $4.694 per million British thermal units.
April gasoline RBJ22,
climbed 3% to $3.181 per gallon. Avril fuel oil RBJ22,
rose 6.6% to $3.362 per gallon.
Oil gains continue, with analysts commenting that the additional crude resulting from the deal to release 60 million barrels from International Energy Agency member countries’ emergency oil reserves is seen as a mere a drop in the bucket of what would be needed to deal with potential war-related disruptions.
That’s when global buyers shunned Russian oil, with Trafigura Group offering a steep discount on Ural-grade cargo for $18.60 a barrel making no bids on Tuesday, Bloomberg and other media reported.
Read: Oil soars, but history says prices eventually fall after countries release emergency reserves
“Russia is entering a new phase of the campaign, bringing much more force and bombarding civilian areas. This poses the risk that the West will come under increasing pressure to sanction Russian oil and gas exports, with all that that would entail,” Neil Wilson, chief market analyst for Markets.com, said in a note to journalists. clients.
“Centrica said it was urgently seeking to end its natural gas supply deal with Gazprom – a self-sanction already well underway. Exxon Mobil followed Shell and BP in saying it would leave Russia, leaving $4 billion in assets in doubt. We also see this with container ships and banks,” he said.
War in Ukraine: Both sides say they are ready for new talks as Russia renews its assault on the key city of Kharkiv
Wilson also noted that OPEC+ technical exports had reduced their expectations for the daily oil market surplus by 200,000 barrels to 1.1 million barrels.
“But the market isn’t really moving on that so much as sheer fear of an immediate supply disruption; traders are getting hold of barrels at all costs,” Wilson said.
Oil futures remained higher following OPEC+’s decision to continue with its plan to ramp up production.
This “modest increase” may signal that OPEC+ “is not as concerned about higher prices as others, and might just be willing to stick with its original plan throughout given that prices have already hit $100, Rohan Reddy, research analyst at Global X, told MarketWatch.
The EIA reported Wednesday that U.S. crude inventories fell 2.6 million barrels for the week ending Feb. 25.
On average, the EIA is expected to show crude inventories up 2.3 million barrels, according to analysts polled by Platts of S&P Global Commodity Insights. The American Petroleum Institute announced a drop of 6.1 million barrels on Tuesday.
The EIA also reported weekly inventory declines of 500,000 barrels of gasoline and 600,000 barrels of distillates. The analyst survey showed expectations for weekly supply declines of 1.8 million barrels for gasoline and 2 million barrels for distillates.
EIA data showed crude inventories at the Cushing, Okla., Nymex delivery hub edged down 1 million barrels for the week, while Strategic Petroleum Reserve inventories fell 2 .4 million barrels.