Oil to end week down more than 5% but still higher than $100 a barrel
Volatility has scared players out of the oil market, which in turn is likely to exacerbate price swings
18 March 2022 - 16:01
byShadia Nasralla
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil drums are shown near industrial plants and manufacturing facilities in the Keihin industrial area in Kawasaki, Kanagawa Prefecture, Japan. File photo: BLOOMBERG/SOICHIRO KORIYAMA
London — Oil prices were set for a second straight weekly loss, but found a floor above $100 a barrel on Friday after volatile trading this week, with no easy replacement for Russian barrels in sight in a market already marked by tight supply.
Brent crude futures had fallen 29c, or 0.3%, to $106.35 a barrel by 12.45pm GMT, after surging nearly 9% on Thursday in the largest percentage gain since mid-2020.
US West Texas Intermediate (WTI) crude futures were up 8c, or 0.1%, at $103.06 a barrel, adding to an 8% jump on Thursday.
Both benchmark contracts were set to end the week down more than 5%, after having traded in a $16 range. Prices hit 14-year highs nearly two weeks ago, encouraging bouts of profit taking since then.
The supply crunch from traders avoiding Russian barrels, stuttering nuclear talks with Iran, dwindling oil stockpiles and worries about a surge of Covid-19 cases in China hitting demand have combined to produce a rollercoaster ride for crude prices.
The volatility has scared players out of the oil market, which in turn is likely to exacerbate price swings.
Russia said an agreement had yet to be reached after a fourth day of talks with Ukraine during which some signs of progress had emerged earlier in the week.
“President Putin appears unwilling to end hostilities. This should ensure that the energy complex remains well supported with plenty of scope for further volatility,” PVM oil market analyst Stephen Brennock said.
He also said rising US interest rates pointed to a stronger US economy, which could underpin oil demand, after the Federal Reserve on Wednesday raised interest rates for the first time since 2018 and laid out an aggressive plan to push borrowing costs to restrictive levels in 2023.
Meanwhile, output from the Opec+ producer group in February undershot targets even more than in the previous month, sources said, while the International Energy Agency said oil markets could lose 3-million bpd of Russian oil from April.
Consultancy FGE said on-land product stocks at key countries are 39.9-million barrels lower for this time of the year relative to the 2017-2019 average.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil to end week down more than 5% but still higher than $100 a barrel
Volatility has scared players out of the oil market, which in turn is likely to exacerbate price swings
London — Oil prices were set for a second straight weekly loss, but found a floor above $100 a barrel on Friday after volatile trading this week, with no easy replacement for Russian barrels in sight in a market already marked by tight supply.
Brent crude futures had fallen 29c, or 0.3%, to $106.35 a barrel by 12.45pm GMT, after surging nearly 9% on Thursday in the largest percentage gain since mid-2020.
US West Texas Intermediate (WTI) crude futures were up 8c, or 0.1%, at $103.06 a barrel, adding to an 8% jump on Thursday.
Both benchmark contracts were set to end the week down more than 5%, after having traded in a $16 range. Prices hit 14-year highs nearly two weeks ago, encouraging bouts of profit taking since then.
The supply crunch from traders avoiding Russian barrels, stuttering nuclear talks with Iran, dwindling oil stockpiles and worries about a surge of Covid-19 cases in China hitting demand have combined to produce a rollercoaster ride for crude prices.
The volatility has scared players out of the oil market, which in turn is likely to exacerbate price swings.
Russia said an agreement had yet to be reached after a fourth day of talks with Ukraine during which some signs of progress had emerged earlier in the week.
“President Putin appears unwilling to end hostilities. This should ensure that the energy complex remains well supported with plenty of scope for further volatility,” PVM oil market analyst Stephen Brennock said.
He also said rising US interest rates pointed to a stronger US economy, which could underpin oil demand, after the Federal Reserve on Wednesday raised interest rates for the first time since 2018 and laid out an aggressive plan to push borrowing costs to restrictive levels in 2023.
Meanwhile, output from the Opec+ producer group in February undershot targets even more than in the previous month, sources said, while the International Energy Agency said oil markets could lose 3-million bpd of Russian oil from April.
Consultancy FGE said on-land product stocks at key countries are 39.9-million barrels lower for this time of the year relative to the 2017-2019 average.
Reuters
CLYDE RUSSELL: India eyes Russia’s coal as world eyeballs Russia
BJORN LOMBORG: Sensible alternatives to Russian oil and gas required
Interest rates, war and oil keep lid on global stock rebound
JSE firmer, but rally takes a breather
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Oil extends gains as Russia-Ukraine talks falter
Gold slides as dollar heads higher
Commodities stall amid concern about peace talks progress
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.