Oil prices are rising.. Brent crude above $ 116

Oil prices are rising.. Brent crude above $ 116

Oil prices rose during trading today, Thursday, May 26, 2022, to continue their cautious rise this week, amid indications of a tight supply.

It comes as the European Union is arguing with Hungary over plans to ban oil imports from Russia, the world’s second-largest crude exporter, in response to its invasion of Ukraine.

Oil Prices Today

The price of the futures contracts for the benchmark Brent crude – for delivery next July – rose by 2.05%, to reach 116.68 dollars per barrel.

The price of future contracts for West Texas Intermediate crude – for delivery next July – increased by 2.8%, recording 113.83 dollars per barrel.

A larger-than-expected drop in US oil inventories in the week ending May 20, after rising exports, supported the market on Wednesday; Oil prices ended higher after a volatile session.

Russian Oil Embargo

Analysts said that stockpile drawdowns and a possible European Union embargo on Russian oil, in response to what Moscow calls its “special military operation” in Ukraine, have pushed prices higher.

“The focus in oil markets is next week’s EU summit, at which another attempt will be made to agree an EU-wide embargo on Russian oil,” Stephen Innes, managing partner at SBI Asset Management, said in a note.

For his part, the President of the European Council, Charles Michel, said yesterday, Wednesday, that he was confident that an agreement could be reached before the next meeting of the Council on May 30.

Hungary Crisis

however; Hungary remains a stumbling block to the unanimous support needed for EU sanctions; Hungary is pressing for about 750 million euros ($800 million) to modernize its refineries and expand a pipeline from Croatia to enable it to move away from Russian oil.

Even without an official ban, there is little Russian oil on the market; Buyers and trading houses avoid dealing with suppliers of crude oil and fuel from the country.

ANZ analysts noted that shipments from the Baltic ports are taking longer trips to Asian refineries, while deliveries to the Netherlands and France have almost stopped.

American Demand

There are also other factors supporting a further rise in oil prices, said Suganda Sachdeva, vice president of commodity research at Religaar Brooking, referring to the US holiday next Monday.

He added, “All variables point to more gains in oil prices in the future.”

Lack Of Supplies

Global crude supplies continue to tighten as buyers avoid oil from Russia, the world’s second-largest oil exporter, amid sanctions after its invasion of Ukraine, which Russia calls a “special military operation”.

The new French Foreign Minister said, on Tuesday, that she is optimistic about a change in the position of a number of countries that still oppose a new sanctions package from the European Union that would cancel Russian oil imports to the European Union, noting that the bloc will conclude an agreement that will have an impact on reducing global supply. .

Demand In China

In China, the world’s largest oil importer, Beijing has intensified quarantine efforts to end the outbreak of Corona that began a month ago, while the authorities in Shanghai plan to keep most restrictions in place this month, before a full lifting for two months starting from next June 1.

“Oil prices rose, as risk sentiment appears to be recovering from recent recession fears, with China gradually easing its lockdowns and stimulus measures,” said CMC Markets analyst Tina Ting.

Oil prices raise Iraq’s cash reserves to 90 billion dollars by the end of 2022

Iraq is preparing to reap many profits from the rise in oil prices, which have been trading above the $100 per barrel barrier since the beginning of this year.

Iraq expects that there will be no budget deficit, supported by the rise in crude prices, with financial savings that will be directed to a number of vital sectors in the country, as well as an increase in foreign exchange reserves.

Iraq succeeded in achieving oil revenues of about 38.58 billion dollars during the period from January to the end of last April, compared to 21.09 billion dollars during the same period last year 2021.

Revenues from Iraqi oil exports jumped during the first four months of this year by 82.9%, supported by high oil prices.

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