Ana sayfa » Oil rises 3% to 7-yr highsdue to Ukraine issue and global supply shortage

Oil rises 3% to 7-yr highsdue to Ukraine issue and global supply shortage

Saudi Arabia and UAE could calm the continuing increase by boosting output

by BUNKERIST

Oil prices closed at a seven-year high on Friday, up 3% on Friday amid growing fears of an invasion of Ukraine by Russia, one of the leading energy producers, and concerns over tight global crude supplies.

Washington said it was concerned that Russia was building up troops to launch an invasion in Ukraine and urged all US citizens to leave the country within 48 hours.

Boris Johnson has advised British citizens to leave Ukraine, saying NATO allies would impose a heavy package of economic sanctions if Russia invaded Ukraine.

Brent crude futures rose $3.03, or 3.3%, to $94.44 a barrel, while West Texas Intermediate (WTI) crude was up $3.22, or 3.6%, to $93.10 per barrel.

Both indicators hit their highest levels since late 2014, topping peaks and posting eight-week gains on the back of growing concerns over global supplies as demand recovers from the coronavirus pandemic.

Trading volumes soared in the last hour of trading, with volumes for the global benchmark Brent hitting the highest in more than two months.

The International Energy Agency has raised its demand forecast for 2022 and expects global demand to increase by 3.2 million barrels per day (bpd) this year to reach an all-time record of 100.6 million barrels per day.

The IEA said it could help calm volatile oil markets if Saudi Arabia and the United Arab Emirates pump more crude. Adding that the OPEC+ alliance produced 900,000 barrels below target in January.

The two OPEC producers have the most production capacity and could help global oil inventories not to keep dropping, which is among the factors pushing prices towards $100 a barrel and deepening worldwide inflation.

Indirect US-Iran nuclear talks resumed this week after a 10-day hiatus. A deal could help lift sanctions on Iranian oil and ease the supply squeeze.

US drillers have added the most oil wells in a week since February 2018.

Baker Hughes said, as an indicator of future production, drillers increased the number of rigs by 19 in a week to 516, which is highest level since April 2020.