Uncertain path for oil markets in coming days
By David Gaffen
(Reuters) – The crude oil market heads into one other week of uncertainty, buffeted on one facet by the continued battle between Russia and Ukraine and the enlargement of COVID-related lockdowns in China, the world’s largest crude importer.
Brent crude and U.S. West Texas Intermediate (WTI) crude surged final week. The 2 benchmarks gained 11.5% and eight.8%, respectively, on expectations that sanctions on Russia stemming from its invasion from Ukraine would begin to chunk into each its exports and manufacturing.
Brent closed at $120.65 a barrel and U.S. West Texas Intermediate (WTI) crude ended at $113.90 on Friday.
Oil analysts imagine the market will battle to search out sufficient provide in coming months as Russian exports are anticipated to fall by wherever from 1 to three million barrels a day. Russia is the world’s second greatest crude exporter.
The Biden administration is contemplating one other launch of oil from the Strategic Petroleum Reserve that could possibly be larger than the sale of 30 million barrels earlier this month, a supply mentioned. In whole, the U.S. and different members of the Worldwide Power Company (IEA) launched about 60 million barrels from reserves.
“They undoubtedly have the capability to do considerably extra – they (IEA members) have about 1.5 billion barrels of SPR inventories. By all means, this was the entire concept of an SPR, to supply aid in emergency instances,” mentioned Natasha Kaneva, head of commodities analysis at JP Morgan.
The speedy unfold of coronavirus circumstances in China may undermine demand. China’s monetary hub of Shanghai mentioned on Sunday it could lock down town in two phases to hold out COVID-19 testing over a nine-day interval, after it reported a brand new each day file for asymptomatic infections. JP Morgan final week lowered its expectations for second-quarter oil demand in China by 520,000 barrels per day to fifteen.8 million bpd.
(Reporting by David Gaffen; modifying by Diane Craft)
