Crude oil prices surged again on Thursday as the International Energy Agency’s warnings that three million barrels a day (bpd) of Russian oil and products could be shut in from next month alarmed markets. IEA warned that the implications of a potential loss of Russian oil exports to global markets cannot be understated.
In its flagship Oil Market report for the month of March, the intergovernmental agency opined that the prospect of large-scale disruptions to Russian oil production was threatening to create a global oil supply shock. Though OPEC+ is, for now, sticking to its agreement to increase supply by modest monthly amounts, only Saudi Arabia and the UAE hold substantial spare capacity that could immediately help to offset a Russian shortfall, the report stated.
Brent Oil Futures for May settlement touched a high of $104.42 in Thursday’s trade. Prices were hovering below the $100 mark in the previous two sessions. It is currently trading at $103.63, up 5.72 percent from Wednesday’s close of $98.02. The day’s trade ranged between a high of $104.42 and a low of $97.84.
Brent Oil Futures for May settlement had jumped to a high of $139.13 on March 7 in the aftermath of the Russian invasion of Ukraine and the attack on a nuclear power plant. Prices of the black fluid had however cooled off and touched a low of $96.93 on March 16 amidst demand related fears.
Likewise, West Texas Intermediate crude for April settlement traded between a high of $100.98 and low of $94.86.
It is currently trading at $100.41, having surged 5.65 percent from Wednesday’s close of $95.04.
The IEA has acknowledged that Russia’s invasion of Ukraine has brought energy security back to the forefront of political agendas. Citing the marked impact on inflation and economic growth that a sustained surge in oil and commodity prices could have, IEA has also lowered its expectations for GDP as well as oil demand.
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