Oil rose as high as $1 a barrel on Thursday after falling below key technical support levels in the previous session as investors focused on how tight fuel supplies could become from the energy crisis between Europe and Russia.
Brent crude futures rose 63 cents, or 0.7%, to $88.63 a barrel as of 0628 GMT, after closing at the lowest level since early February in the previous session. West Texas Intermediate (WTI) crude futures were up 70 cents, or 0.9%, at $82.64 a barrel.
Prices were bolstered by Russian President Vladimir Putin’s threat to halt the country’s oil and gas exports if price ceilings are imposed by European buyers.
The European Union has proposed limiting Russian gas prices after just a few hours. Russia’s Gazprom has already stopped the flow from the Nord Stream 1 pipeline and cut off a significant percentage of the supply to Europe. If Moscow fulfills its threat, energy risks are raised in some of the world’s richest countries this winter.
The energy war between Western countries and Russia is being shaped by various foreign powers. Any agreement between the West and Iran are on the agenda for years. The potential impact of restoring the deal on Tehran’s nuclear program is significant and will lead to the lifting of sanctions on Iran’s oil exports. But the deal has turned into an unconvincing fairy tale for future generations.
According to reports, in response to rising energy prices, Britain’s new Prime Minister, Liz Truss, will seek to leverage the country’s alternative oil production methods and more of its North Sea reserves. The British government is expected to announce dozens of new North Sea oil and gas exploration licenses to boost domestic production, according to two sources familiar with the government’s discussions.
Meanwhile, some central banks around the world are expected to start a new round of rate hikes to fight inflation.
The European Central Bank is expected to raise interest rates sharply at its meeting on Thursday. Investors are focused on the US Federal Reserve meeting on Sept. 21.
