Workers walk while oil pumps are seen in the background at the Uzen oil and gas field in the Mangistau region of Kazakhstan, November 13, 2021. REUTERS/Pavel Mikheyev
LONDON, March 30 – Oil prices rose more than 3% on Wednesday on supply shortages and the growing prospect of new Western sanctions against Russia, even as Moscow and Kyiv held peace talks.
Brent crude futures were up $3.07, or 2.79%, to $113.30 by 1215 GMT, reversing a 2% loss in the previous session.
U.S. West Texas Intermediate (WTI) crude futures rose $3.20, or 3.07%, to $107.44 a barrel, reversing a 1.6% drop on Tuesday.
Crude oil’s rally “at the very least suggests that the oil market has a strong level of skepticism about any ‘progress'[in the peace talks],” Commonwealth Bank analyst Tobin Gorey said in a note.
The market saw a sharp sell-off in the previous session after Russia vowed to scale back military operations around Kyiv, but reports of attacks continued. Continue reading
“We would see an additional million barrels a day of Russian production at risk if relations with Europe deteriorate and an oil embargo is imposed, although we still think this is unlikely,” consulting firm JBC Energy said in a statement.
The United States and its allies are planning new sanctions against additional sectors of the Russian economy critical to sustaining the invasion of Ukraine, including military supply chains. Continue reading
Russia’s top lawmaker on Wednesday warned the European Union that exports of oil, grain, metals, fertilizers, coal and timber could soon be priced in rubles, after earlier requiring “unfriendly” countries to pay for their gas in rubles . Continue reading
The oil market’s focus has shifted to tight supply after the American Petroleum Institute reported that crude inventories fell by 3 million barrels in the week ended March 25, three times the fall 10 analysts polled by Reuters averaged expecting had.
To keep the market tight, major oil producers are likely to stick to their projected production target of about 432,000 barrels per day when OPEC+ – the organization of the petroleum exporting countries and allies including Russia – meets on Thursday, multiple sources close to the group said . [nL2N2VV1LR]
However, oil prices are under pressure from weaker demand in China due to tightened mobility restrictions and COVID-19-related lockdowns in several cities, including financial hub Shanghai. Continue reading
Additional reporting by Sonali Paul in Melbourne and Muyu Xu in Beijing; Editing by Mark Potter and Jason Neely