Oil prices rose today as concerns about potential supply disruptions after the Russian invasion of Ukraine and associated sanctions overshadowed talk of a coordinated global drawdown of crude stocks to calm markets. Brent crude futures rose $3.04, or 3.1 percent, to $101.01 by 08:43 GMT. The benchmark touched a seven-year high of $105.79 after the start of the Russian invasion of Ukraine last week, reports Al-Rai daily.
And US West Texas Intermediate crude futures for April delivery rose $2.56, or 2.67 percent, to $98.28. And US crude contracts touched a high level of 99.10 dollars a barrel the previous day, and recorded, upon settlement, a rise of more than 4 percent.
“The fragile situation in Ukraine, financial and energy sanctions against Russia will keep the energy crisis festering and oil will rise well above $100 per barrel in the near term, and even more if the conflict escalates further,” Louise Dixon, senior oil market analyst at Rystad Energy, said. Major oil and gas companies, such as BP and Shell, have announced plans to exit Russian operations and joint ventures. Buyers of Russian oil are struggling with payments and availability of ships with sanctions in place.
However, market sentiment was supported by the US and its allies’ search for a coordinated drawdown of crude stocks to ease supply disruptions. And the media reported that this withdrawal may reach between 60 and 70 million barrels. “This potential drawdown is limiting higher oil prices for the time being,” analysts at the Commonwealth Bank of Australia said.
The International Energy Agency is preparing to hold an extraordinary ministerial meeting today to discuss the role that its members can play in stabilizing oil markets. The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, will also meet tomorrow as they are expected to maintain a planned gradual increase in supplies during April.
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