The current course of oil trading on the commodity market shows that despite the agreement of OPEC and OPEC+ allies adopted at the latest meeting of this oil cartel on Thursday 5 May on a more modest increase in crude oil production, it still maintains oil prices above US$ 100 per barrel. This influential energy alliance of OPEC countries and their partners known as OPEC+, which includes the Russian Federation – the second largest oil producer in the world – has reached an agreement to increase oil production by an additional 432 thousand barrels of oil per day.
Based on these facts, a few days after the OPEC and OPEC+ alliance decision, during Wednesday’s European morning of 11 May, at 6:48 am CET, West Texas Intermediate (WHI) light crude oil traded on the New York Mercantile Exchange (NYMEX) commodity market at US$ 101.48 per barrel, with daily growth of +1.7241%. At the same time the European counterpart to WTI oil, namely North Sea Brent crude oil traded on the Intercontinental Exchange Europe (ICE) commodity market at US$ 104.26 per barrel with a daily growth of +1.76% so far. These oil prices on commodity markets were achieved in a situation where the EUR/USD global currency pair traded at a mutual exchange rate of US$ 1.054 per EUR with the current daily appreciation of EUR by +0.12 % against the USD.
According to analysts, given the uncertain joint outcome of the ban on Russian oil imports to European Union (EU) countries, oil prices can continue to rise slightly in day-to-day trading on the commodity market. However, in the event of the adoption of a joint embargo by EU countries, a steeper rise in the price of oil on the commodity market can be expected, according to investment strategists. The current situation regarding the joint EU embargo on Russian oil imports does not have sufficient agreement among the countries of the EU, and Hungary in particular rejects it. Subsequently, the Czech Republic and Bulgaria agree to impose this embargo, but want additional time so they will be able to replace Russian oil supplies without drastic economic shocks. Experts say that ending Russian oil consumption for these countries, along with Slovakia, will be a strong price shock in any case, and the time delay will work against the strategic political and especially economic goal of this embargo against the Russian Federation.
According to economic correspondents, on Wednesday, 11 May 2022 oil prices have risen again. Some, not only for Russian reporters, make bold claims that this war between Ukraine and the Russian Federation is in fact a covert US war against the Russian Federation through Ukraine, and the Russian Federation has only launched a defensive manoeuvre a few days before Ukraine itself attacks it, says Russian propaganda. However, the dynamic development of the arms trade, as well as the gas and oil trade, remains at the heart of the matter, as it has historically been proven that even devastating wars bring scientific and technological development to humanity. Stephen Brennock, a senior analyst at PVM Oil Associates in London, said expectations were that OPEC+ would “remain unmoved” by the prospect of an increasing Russian oil shortfall, even as several member states struggle to meet their production targets.