It is stated that this situation may indicate physical shortages for the near term as oil continues its rally, which is strengthened by the continuing increasing global demand and the deepening of geopolitical tensions in Ukraine.
West Texas Oil continued its eight-week gain, rising 1 percent above its 2014 peak. A record $2.37 gap has emerged between the price of physical Brent oil and futures contracts, as a sign that the market is tightening. The difference between the two closest futures contracts was close to $2.
The latest surge in the world's most important commodity came after talks over the Ukraine crisis between Joe Biden and Vladimir Putin over the weekend were found to have failed to de-escalate tensions. While the USA stated that it could attack Ukraine at any time, Russia has repeatedly stated that it has no plans to invade its neighbor.
While crude oil continues to rise with the crisis in Europe, increasing global demand, production problems and decreasing stocks continue to support this rally. The commodity is experiencing its longest weekly streak since October before the Omikron variant appeared. In addition, it is stated that a future invasion of Ukraine may cause risks on the global energy flow by causing US-led sanctions.
The probability of $100 is increasing.
“$100 is within sight,” said Oversea Chinese Bankin Corp. Economist Howie Lee stated that a large-scale conflict between Russia and Ukraine could raise this figure to over $100.
US National Security Advisor Jake Sullivan said in an interview with CNN on Sunday that a large-scale military operation imminent is "a possibility to be considered". Biden, who met with the President of Ukraine on the same day, said that in case of any aggression, the US and its allies will take action "quickly and decisively".
West Texas Oil for March delivery rose 1.6 percent to $94.57 on the Nymex market.
Brent oil for April delivery rose 1.3 percent to $95.66 on the London ICE Futures Europe market.
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