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 — The oil price rose on Wednesday, supported by potential supply disruption after Ukrainian attacks on Russian refineries, signs of strong demand and hopes that the Federal Reserve might start cutting interest rates soon despite somewhat sticky US inflation.
Ukraine launched a sweeping drone attack on Russian regions on March 13, causing a fire at Rosneft’s biggest oil refinery in what President Vladimir Putin said was an attempt to disrupt Russia’s presidential election.
“The sudden but understandable brightening of (oil price) sentiment has been triggered by the continuous strikes on Russian refiners,” said Tamas Varga of oil broker PVM.
Brent crude futures for May rose $1.06, or 1.3%, to $82.98 a barrel by 11.04am GMT. US West Texas Intermediate crude for April gained $1.15, or 1.5%, to $78.71.
Despite the rally, Brent has traded in a narrow range above $80 for more than a month, briefly rising above $84 in that time.
Also adding support, Varga said, was Tuesday’s supply report from the American Petroleum Institute.
In an indication of healthy demand, US crude oil and fuel inventories fell last week, according to sources citing the API report ahead of Wednesday’s official US inventory figures.
In an earlier sign of strong demand, oil cartel Opec on Tuesday stuck to its forecast for oil demand growth of 2.25-million barrels per day (bpd) in 2024, higher than many other forecasts.
The International Energy Agency (IEA), which expects demand growth to be much lower, updates its forecasts on March 14.
Oil and the wider financial markets also found support from sentiment that slightly hotter than expected US inflation will not derail interest rate cuts by the middle of 2024. Lower rates support oil demand.
“The risk environment has largely stayed unfazed, riding on the firm belief that current market pricing for a rate cut only in June will do the job,” said IG market strategist Yeap Jun Rong.
In a note to clients, Capital Economics analysts said they still forecast the Fed to start easing policy “around June”.
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 on attacks on Russian refineries
API data shows drop in US oil and fuel stocks
London — The oil price rose on Wednesday, supported by potential supply disruption after Ukrainian attacks on Russian refineries, signs of strong demand and hopes that the Federal Reserve might start cutting interest rates soon despite somewhat sticky US inflation.
Ukraine launched a sweeping drone attack on Russian regions on March 13, causing a fire at Rosneft’s biggest oil refinery in what President Vladimir Putin said was an attempt to disrupt Russia’s presidential election.
“The sudden but understandable brightening of (oil price) sentiment has been triggered by the continuous strikes on Russian refiners,” said Tamas Varga of oil broker PVM.
Brent crude futures for May rose $1.06, or 1.3%, to $82.98 a barrel by 11.04am GMT. US West Texas Intermediate crude for April gained $1.15, or 1.5%, to $78.71.
Despite the rally, Brent has traded in a narrow range above $80 for more than a month, briefly rising above $84 in that time.
Also adding support, Varga said, was Tuesday’s supply report from the American Petroleum Institute.
In an indication of healthy demand, US crude oil and fuel inventories fell last week, according to sources citing the API report ahead of Wednesday’s official US inventory figures.
In an earlier sign of strong demand, oil cartel Opec on Tuesday stuck to its forecast for oil demand growth of 2.25-million barrels per day (bpd) in 2024, higher than many other forecasts.
The International Energy Agency (IEA), which expects demand growth to be much lower, updates its forecasts on March 14.
Oil and the wider financial markets also found support from sentiment that slightly hotter than expected US inflation will not derail interest rate cuts by the middle of 2024. Lower rates support oil demand.
“The risk environment has largely stayed unfazed, riding on the firm belief that current market pricing for a rate cut only in June will do the job,” said IG market strategist Yeap Jun Rong.
In a note to clients, Capital Economics analysts said they still forecast the Fed to start easing policy “around June”.
Reuters
Ukraine drones hit Rosneft refinery in second day of strikes
Ukraine damages top Russian oil refinery in sweeping rocket attack
Opec and energy watchdog at odds on oil demand, transition to cleaner fuels
Oil gains ground amid hope for strong US demand
Oil loses more ground on worry about demand
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
Ukraine damages top Russian oil refinery in sweeping rocket attack
Russia, China and Iran to hold warship drills in Gulf of Oman
US announces new $300m military aid package for Ukraine
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.