Oil prices rose again by more than 6%

0

On Tuesday, 12 April 2022, the commodity market saw a sharp rise in oil prices, with daily increases in both, North Sea Brent crude oil and West Texas Intermediate (WTI) light crude oil, exceeding a 6% daily rise in the price of these commodities. On this day Brent crude traded with a daily increase of +6.26% trading at US$ 104.64 per barrel and WTI crude oil reached a price of US$ 100.60 per barrel with a daily growth of +6.69%. According to economic correspondents, the main reason for the price increase was concerns regarding Organization of the Petroleum Exporting Countries’ (OPEC) announcement that it would not be possible to replace oil supplies from Russia in the event of a disruption.

This price increase in oil commodity was also exacerbated by the situation in China, which eased some very tough restrictions in Shanghai concerning the Covid-19 pandemic and fears of reduced demand for oil have disappeared. In Shanghai, more than 26 million people have been hermetically isolated and life has come to a standstill, and according to reporters, the city was on the brink of a humanitarian crisis when food and medicine began to run out. The Shanghai city administration said on Monday, 11 April 2022, that more than 7,000 residential blocks were classified as lower-risk areas, and after 14 days of these areas not reporting any new infections, it would be possible to open these areas. This will affect several million people living in this giant Chinese city.

Based on these facts, oil prices on the commodity markets rose, but on 13 April oil prices were corrected when they declined due to the profit withdrawals by investors. Today at 7:01 am CET, WTI oil traded on the New York Mercantile Exchange (NYMEX) commodity market at US$ 100.17 per barrel, with a daily decline of -0.43%. At the time mentioned the European counterpart to WTI, Brent crude traded on the Intercontinental Exchange Europe (ICE) commodity market at US$ 104.47 per barrel, with a daily decline of -0.16%. These oil prices were achieved in a situation when the exchange rate of the US dollar (USD) as the world’s major commodity currency continued to strengthen and according to the US Dollar Currency Index (DXY) we saw the USD at a price level of 100.32 with the current already milder daily growth of +0.03%.

As already mentioned, on 12 April OPEC warned that it would not be possible to replace about 7 million barrels a day from the Russian Federation production in the event of a Russian production disruption either because of the cessation of exports by the world’s biggest country or as economic correspondents state as a more likely version, the imposition of a ban on oil exports for the Russian Federation as a so-called oil embargo, which Iran, for example, has faced several times. The United States has already stopped imports of Russian oil and a ban on importing this oil into the United States has been issued. The European Union has yet to agree to a possible embargo on Russian oil, but some foreign ministers have said the option is still on the table, but Hungary, for example, has so far rejected the embargo.

LEAVE A REPLY

Please enter your comment!
Please enter your name here