The bullion might be in consolidation for a week or two before resuming the upward march towards $2,000, analyst says
The troubled National Health Service now has 6.6-million patients waiting to see GPs, get scans or have operations
Sars and corruption busters need more tools to investigate, says Edward Kieswetter
The ruling party gathering hit by litigation and a breach of security allegedly leading to the cloning of delegates’ tags
The R892m deal means Seriti will take a 51% interest in Windlab Africa, which is overseeing 3.5GW of renewable energy projects
Consumer finances crumble under the pressure of rising prices and interest rates, Unisa vulnerability report shows
Group homes in on home deliveries trend and hopes to supply electricity to Eskom
Prime Minister Anthony Albanese wants claims to be reviewed his predecessor secretly took charge of many ministries during the pandemic
Reece James seemed to have sealed the points for the hosts with a 77th-minute goal, but the striker scored in stoppage time
Pharmaceutical giant has been forced to pay $3.5bn in settlements so far to resolve cancer cases
London — Oil prices rose sharply on Thursday, extending a rally from the previous session, on escalating unrest in oil producer Kazakhstan and supply outages in Libya.
The global benchmark Brent crude futures rose $1.09, or 1.4%, to $81.89 a barrel, by 1054 GMT. US West Texas Intermediate (WTI) crude futures gained $1.17, or 1.5%, to $79.02 a barrel. Both contracts were trading at their highest since late November.
Brent’s six-month market structure stood at about $4 a barrel in backwardation — where current prices trade at a premium to future prices — its widest since late November and usually a sign of a bullish market.
Russia sent paratroopers into Kazakhstan on Thursday to help quell a countrywide uprising after deadly violence spread across the tightly controlled former Soviet state.
“The political situation in Kazakhstan is becoming increasingly tense,” Commerzbank said. “And this is a country that is currently producing 1.6-million barrels of oil per day.”
There are no indications that oil production has been affected so far.
Libyan oil output is down by over 500,000 barrels per day (bpd) due to pipeline maintenance and oilfield shutdowns.
Prices rallied despite a surge in US fuel stocks last week. Crude oil stockpiles fell last week while petroleum inventories surged more than 10-million barrels, the biggest weekly build since April 2020, as supplies backed up at refineries due to reduced fuel demand.
Also, minutes from a US Federal Reserve meeting that showed policymakers may raise rates more quickly than markets anticipated weighed on riskier assets such as oil.
Opec+, a group that includes members of oil cartel Opec, Russia and other producers, agreed on Tuesday to add another 400,000 bpd of supply in February, as it has done each month since August.
“Our reference case now assumes the alliance will fully phase out the remaining 2.96-million bpd of oil production cuts by September 2022,” JPMorgan analysts said in a note.
“With signs of demand withstanding the Omicron variant, low stocks and increasing market vulnerability to supply disruptions, we see the need for more Opec+ barrels,” the bank said.
JPMorgan forecast Brent prices will average at $88 a barrel in 2022, up from $70 last year.
Meanwhile, the world’s top oil exporter, Saudi Arabia, cut the official price for all grades of crude it sells to Asia in February by at least $1 a barrel, three sources with knowledge of the matter said on Thursday.
Would you like to comment on this article? Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.