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Highlights
- Crude oil prices rose on Thursday.
- The prices were dropped on Wednesday for the fifth time in the last six days as traders reacted to the progress in Russia-Ukraine peace talks.
- Oil inventories in the US jumped by 4.3 million barrels in the week to 11 March to land at 415.9 million barrels.
Crude oil prices rose in the early trading session on Thursday after the International Energy Agency (IEA) said a decline in oil demand due to heating oil prices would not offset Russian oil supplies.
The prices were dropped on Wednesday for the fifth time in the last six days as traders reacted to the progress in Russia-Ukraine peace talks and a surprising increase in U.S. inventories.
Both oil benchmarks reached below US$100/bbl on Tuesday for the first time since late February. The prices reached 14-year high levels on 7 March 2022 and both benchmarks dropped more than US$30 from those high levels. Trading has been extremely volatile since Russia announced to invade Ukraine.
Source: Refinitiv Eikon
On Thursday, May delivery Brent Crude oil futures inched higher and last traded at US$99.31 per barrel up 1.24%, while April delivery WTI crude oil futures exchanged hands at US$96.31 per barrel, up 1.34% at 12:40 PM AEDT.
Also Read: Crude oil surges to 14-year highs on delays in Iranian talks
What IEA says
In its March 2022 Oil Market Report, the IEA says that nearly 3Mbpd of Russian oil output could be shut-in due to Western sanctions and as buyers cut Russian exports, significantly higher than 1Mbpd drop in demand due to higher oil prices.
Must Watch: As Russia-Ukraine War Intensifies, Commodities Also Soars
At the same time, oil inventories in the US jumped by 4.3 million barrels in the week to 11 March to land at 415.9 million barrels, as per the records of the U.S. Energy Information Administration. The rise in crude inventories is against analysts’ expectations for a loss.
Furthermore, signs of progress in Russia-Ukraine peace talks added to the bearish sentiments. Russian foreign minister stated that some deals with Ukraine were close to being agreed while Ukraine’s president said that the positions of both countries were sounding more realistic, but time was needed.
In addition to that, on Wednesday, the U.S. Federal Reserve raised interest rates by 25 basis points for the first time in four years to fight rising inflation. However, the oil market's basic trajectory did not change after the news.
Also Read: Crude oil slides from multi-year highs as Iran talks rev up
Bottom Line
Crude oil prices rose on Thursday after International Energy Agency’s March 2022 Oil Market Report stated that squeeze in oil demand due to price hikes would not be enough to counterbalance imports hit by Russian supplies.
Here’s how commodities performed in the last week click here
