Oil prices rise amid attacks on Russian energy facilities, brent crude at $86/bbl

Brent crude oil futures for May delivery rose by 51 cents, reaching $85.85 a barrel at 1333 GMT. Concurrently, the April contract for U.S. West Texas Intermediate (WTI) crude climbed by 62 cents to $81.66. 

Trading activity was sluggish, given the impending expiration of the April contract. Meanwhile, the more active May delivery contract saw an increase of 60 cents, trading at $81.18.

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“Crude oil remains in a positive trend with Brent crude holding firm above $85 per barrel and WTI crude above $81, with support from better than expected Chinese data on industrial production & fixed asset investments, while possibility of supply issues from the middle-east and higher demand estimates is seen keeping sentiments upbeat,” said Pranav Mer, VP – Research (Commodity & Currency) BlinkX and JM Financial.

What’s weighing on crude oil prices?

• Market participants have indicated that Russia plans to boost oil exports through its western ports in March by nearly 200,000 barrels per day (bpd), despite refinery outages, reaching a monthly total of 2.15 million bpd.
• Iraq announced on Monday its intention to decrease crude exports in the upcoming months by over 100,000 barrels per day compared to levels from the previous month. This reduction aims to offset any increase above its OPEC+ quota recorded in January and February. Iraq is adhering to voluntary cuts established with the OPEC+ coalition of oil-exporting nations, which have been extended into the second quarter.
• The combination of Russian outages and prolonged OPEC+ output cuts prompted Morgan Stanley to revise its Brent oil price projections upward by $10 per barrel, now anticipating $90 for the third quarter of 2024. Last week saw both oil contracts experiencing gains, reaching their peak levels since November, partly fueled by the International Energy Agency’s fourth upward adjustment of its 2024 demand forecast since November.
• This week, the primary attention is directed towards the future of monetary policy in major economies, as numerous central banks have maintained elevated interest rates for an extended duration to combat persistent inflation pressures. Reduced interest rates might invigorate demand in the United States, the largest consumer of oil globally, bolstering oil prices.

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Published: 18 Mar 2024, 09:17 PM IST