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Oil prices remain on course for recovery
A pumpjack in the US is doing its job. Photo: Jacob Ford/Odessa American/AP/dpa
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Russia’s war of aggression against Ukraine continues to have an impact on the crude oil market.
Oil prices recouped some of their recent losses on Wednesday. Most recently, a barrel (159 liters) of North Sea Brent cost 113.59 US dollars. That was $3.36 more than the day before.
The price of a barrel of the US West Texas Intermediate (WTI) variety rose by $3.49 to $107.73.
The war between Russia and Ukraine continues to dominate the crude oil market. On Tuesday, signs of rapprochement between the warring parties had caused oil prices to fall significantly.
For the upcoming meeting of the Opec+ oil association on Thursday, experts are expecting another moderate increase in production. The producing countries have been following this course since last summer. Commerzbank expert Carsten Fritsch considers it unlikely that Opec+, which also includes Russia, will increase its funding. The group should feel confirmed in its view that the rise in oil prices was primarily driven by geopolitical risks and not by a supply bottleneck.
Fragile domestic economy in China
In addition, the lockdown in the Chinese financial metropolis of Shanghai should encourage Opec+ to be cautious about possible risks to oil demand, said Fritsch. China’s step is the result of rigorous action against the corona pandemic. The already fragile domestic economy of the world’s second largest economy will be additionally burdened by this. China is one of the world’s largest energy consuming countries.
The recent development of oil reserves in the US only briefly supported oil prices. In the past week, crude oil stocks there had surprisingly fallen significantly. Market participants interpreted this as a sign of a shortage of supply. However, bucking the seasonal trend, demand for gasoline also fell for the third straight week amid high oil prices, data from the US Department of Energy showed. This, in turn, could be a first sign that demand for oil could also be falling.