Oil rises above $105 amid persistent fears over tight supply
Russia's invasion of Ukraine and the lack of an Iranian nuclear deal continues to weigh on market
04 April 2022 - 10:59
byAlex Lawler
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.
London — Oil rose above $105 a barrel on Monday as concern about tight supply arising from Russia's invasion of Ukraine and the lack of an Iranian nuclear deal persisted despite countries releasing oil from strategic reserves.
The invasion of Ukraine in February sharply ramped up supply worries that were already underpinning oil prices. Sanctions imposed on Russia and buyers' avoidance of Russian oil have raised fears of larger supply losses from this month.
Brent crude was up 63c, or 0.6%, to $105.02 a barrel by 10.05am. U.S. West Texas Intermediate crude gained $1.08, or 1.1%, to $100.35. Both contracts slipped $1 when markets opened on Monday.
“Will the release of barrels from strategic reserves fill a shortfall caused by sanctions and buyer aversion to Russian oil? In a word, no,” said Stephen Brennock of oil broker PVM.
Brent dropped by about 13% last week after US President Joe Biden announced a record US oil reserves release and International Energy Agency members committed to further tapping reserves. Crude had hit $139 last month, its highest since 2008.
“This short-term measure to target lower oil prices … doesn't resolve the long-term problem,” said Naeem Aslam of AvaTrade.
Oil also gained support from a pause in talks to revive the Iranian nuclear deal, which would allow a lifting of sanctions on Iranian oil. Iran on Monday blamed the US for the halt.
Some downward pressure on prices came from a truce in Yemen, which could ease threats to supply in the Middle East.
The UN has brokered a two-month truce between a Saudi-led coalition and the Houthi group aligned with Iran for the first time in the seven-year conflict.
Saudi oil facilities have come under attack by the Houthis during the conflict, adding to supply disruption from Russia.
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 rises above $105 amid persistent fears over tight supply
Russia's invasion of Ukraine and the lack of an Iranian nuclear deal continues to weigh on market
London — Oil rose above $105 a barrel on Monday as concern about tight supply arising from Russia's invasion of Ukraine and the lack of an Iranian nuclear deal persisted despite countries releasing oil from strategic reserves.
The invasion of Ukraine in February sharply ramped up supply worries that were already underpinning oil prices. Sanctions imposed on Russia and buyers' avoidance of Russian oil have raised fears of larger supply losses from this month.
Brent crude was up 63c, or 0.6%, to $105.02 a barrel by 10.05am. U.S. West Texas Intermediate crude gained $1.08, or 1.1%, to $100.35. Both contracts slipped $1 when markets opened on Monday.
“Will the release of barrels from strategic reserves fill a shortfall caused by sanctions and buyer aversion to Russian oil? In a word, no,” said Stephen Brennock of oil broker PVM.
Brent dropped by about 13% last week after US President Joe Biden announced a record US oil reserves release and International Energy Agency members committed to further tapping reserves. Crude had hit $139 last month, its highest since 2008.
“This short-term measure to target lower oil prices … doesn't resolve the long-term problem,” said Naeem Aslam of AvaTrade.
Oil also gained support from a pause in talks to revive the Iranian nuclear deal, which would allow a lifting of sanctions on Iranian oil. Iran on Monday blamed the US for the halt.
Some downward pressure on prices came from a truce in Yemen, which could ease threats to supply in the Middle East.
The UN has brokered a two-month truce between a Saudi-led coalition and the Houthi group aligned with Iran for the first time in the seven-year conflict.
Saudi oil facilities have come under attack by the Houthis during the conflict, adding to supply disruption from Russia.
Reuters
JSE firms as investors continue watching Ukraine war
Gold slips as dollar and treasury yields firm on prospect of hawkish rate hikes
Global shares mixed as bonds keep pointing to recession risk for US
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
Missiles hit near Odesa as new Mariupol evacuation bid planned
CLYDE RUSSELL: How Russia’s war in Ukraine boosted Australian commodities
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.