Today, Thursday, oil prices returned to rise again, to compensate for some of the losses they incurred during trading on Wednesday, when they fell to their lowest level in 3 weeks.
Oil prices started trading on the rise today, but later fell, and then rebounded in volatile trading, as fears of shortage of supplies dominated the market, despite the International Energy Agency’s announcement of a huge liberalization of oil from emergency reserves.
Oil Prices Today
Brent crude futures prices – for June 2022 delivery – rose by 1.50%, recording $103.25 a barrel.
The price of West Texas Intermediate crude futures – for delivery in May – also rose by 0.22%, to reach $98.53 a barrel.
Oil prices had ended their trading with losses of about 6%; to its lowest level in 3 weeks, with the International Energy Agency plans to draw from the emergency reserve.
On Wednesday, member states of the International Energy Agency agreed to release 60 million barrels in addition to the 180 million barrels that the United States announced last week; To help bring down prices in a tight market in the wake of the Russian invasion of Ukraine.
On the other hand, analysts and traders said that even with the release of emergency oil stocks, supplies remained tight.
“The oil leak from IEA members reflects strong political resolve against Russian oil due to its invasion of Ukraine, but is not enough to fill the actual supply shortfall,” said a Shanghai-based oil trader.
State refiners in China, the world’s largest oil importer, respect existing Russian oil contracts, but shy away from new ones despite deep discounts in response to Beijing’s call for caution.
“In addition to releasing massive global reserves, demand destruction and recession are the only price-cutting mechanism in a world without buffers,” said Stephen Innes, managing director of SBI Asset Management.
National Australia Bank analyst Baden Moore said the latest release in addition to the IEA’s coordinated release announced on March 1 equates to 1 million barrels per day of additional supplies from May to the end of 2022; What will limit prices in the near term.
“The additional supply reduces near-term upside risks to the market and is likely to avoid the need for refinery cuts in the near term,” Moore added in a note.
“However, the need to restock reserves, expected in 2023, adds to market tightness going forward, as the outlook for core supplies remains unchanged, tipping price risks to the upside,” Reuters reported.
The stalled indirect talks between Iran and the United States to revive the 2015 agreement on Tehran’s nuclear program delayed the possibility of lifting sanctions on Iranian oil; This tightened the market.
Negotiators say political decisions are needed in Tehran and Washington to overcome the remaining issues.