Active oil well pumpjacks are pictured at the Inglewood Oil Field, the largest urban oil field in the United States, from the Baldwin Hills Scenic Overlook in Culver City, California, the United States, March 10, 2022. Picture taken March 10, 2022. REUTERS /Bing Guan
- China is easing some COVID curbs
- US crude stocks are rising, fuel stocks are falling
- Russia’s rhetoric worries traders
- Russian oil and gas condensate production is falling
NEW YORK, April 13 – Oil prices surged on Wednesday as a sharp rise in US crude inventories failed to allay worries about tight global supply and major oil traders are expected to avoid Russian barrels.
Brent crude was up $4.14, or 4%, at $108.78. US West Texas Intermediate (WTI) crude futures were up $3.65, or 3.7%, to $104.25.
The gains came a day after both benchmarks rose more than 6%. The oil market has seen wild swings as end users and traders try to quantify the disruption in Russia’s daily exports following the invasion of Ukraine. Most estimates range from 1 million to 3 million barrels per day.
“Ultimately, the market is running on some of these headlines from Russia that are getting more menacing and that continues to pose a bigger risk,” said Phil Flynn, analyst at Price Futures Group. “There is still a debate about what impact this will have.”
On Tuesday, US President Joe Biden accused Russia of genocide, and the United States, France and Germany all pledged to send more weapons. Biden listed artillery systems, infantry fighting vehicles and helicopters. Continue reading
Major global trading houses plan to scale back crude oil and fuel purchases from Russia’s state-controlled oil companies as early as May 15 to avoid clashing with European Union sanctions on Russia, the world’s second-largest crude oil exporter.
Russian President Vladimir Putin said Moscow could easily divert exports of its vast energy resources away from the West. Some countries, including India, have continued to buy Russian oil at deep discounts. [nL2N2WB10P]
On Tuesday, the International Energy Agency (IEA) lowered expectations for global demand and said rising global production could offset losses in Russian oil production. The IEA expects Russian production to fall by 1.5 million bpd in April and increase to nearly 3 million bpd from May.
The White House will release 180 million barrels from US reserves over six months, part of a release of 240 million barrels by members of the International Energy Agency.
U.S. production is expected to continue increasing from the current 11.8 million barrels per day to around 12 million in 2022. Exports of refined products hit an all-time high as strong overseas demand caused US inventories to fall.
The Organization of the Petroleum Exporting Countries (OPEC) said it was impossible to replace expected supply losses from Russia and it would not pump any more crude. Continue reading
Reporting by Ahmad Ghaddar and David Gaffen/ additional reporting by Arathy Somasekhar; Editing by David Gregorio