Business

Oil continues rally after US ban on Russian imports, sparking supply fears

FILE PHOTO: A worker walking past a pump jack at an oil field owned by the Bashneft company near Nikolo-Berezovka
FILE PHOTO: A worker walks past a pump jack at an oil field owned by the Bashneft company, near the village of Nikolo-Berezovka, northwest of Ufa, Bashkortostan, Russia January 28, 2015. REUTERS/Sergei Karpukhin

March 9, 2022

By Yuka Obayashi and Mohi Narayan

TOKYO (Reuters) – Oil prices firmed on Wednesday amid fears of a potential supply shock when the United States banned Russian oil imports and signs some buyers are already shunning them.

Brent crude futures were up $2.91, or 2.27%, to $130.89 a barrel by 0520 GMT after rising 3.9% the previous day.

US West Texas Intermediate (WTI) crude oil futures rose $2.34, or 1.89%, to $126.04 a barrel after also rising 3.6% on Tuesday.

US President Joe Biden on Tuesday imposed an immediate ban on Russian oil and other energy imports, and Britain said it will phase out Russian oil imports by the end of 2022 in response to Russia’s invasion of Ukraine.

Shell said on Tuesday it would stop buying Russian crude and phase out its stake in all Russian hydrocarbons, becoming one of the first major Western oil companies to abandon Russia entirely.

Meanwhile, Goldman Sachs estimated that more than half of Russian oil exported from ports remained unsold, while JP Morgan estimated that around 70% of Russian sea oil was struggling to find buyers.

Oil prices have risen more than 30% since Russia, the world’s second largest crude oil exporter, launched a so-called “special operation” in Ukraine. Fears of further oil supply disruptions amid escalating sanctions on Moscow have fueled buying, analysts said.

“Upward pressure on oil prices continues to intensify as the market digests the impact of the US import ban on Russian barrels and awaits details on Moscow’s export embargoes,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

Oil prices rose to their highest level since July 2008 on Monday, with Brent hitting $139.13 a barrel and WTI hitting $130.50.

“In addition to US and UK announcement effects, fears of further supply disruptions from Russia due to tightening sanctions against Moscow led to fresh buying,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

“But Monday’s highs are likely to cap in the near term as speculative buying is expected to slow soon and northern hemisphere countries head for spring when fuel demand falls,” he said.

US crude inventories rose 2.8 million barrels in the week ended March 4, bucking analysts’ forecast of a decline, but gasoline and distillate inventories fell, according to market sources, citing figures from the American Petroleum Institute on Tuesday.[EIA/S]

(Reporting by Yuka Obayashi and Mohi Narayan; Editing by Shivani Singh and Lincoln Feast.)

https://www.oann.com/oil-extends-rally-after-u-s-bans-russian-imports-prompting-supply-fears/?utm_source=rss&utm_medium=rss&utm_campaign=oil-extends-rally-after-u-s-bans-russian-imports-prompting-supply-fears Oil continues rally after US ban on Russian imports, sparking supply fears

Caroline Bleakley

USTimeToday is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@ustimetoday.com. The content will be deleted within 24 hours.

Related Articles

Back to top button