Brent Crude soars over $111/bbl, at 8-yr high
Fears that sanctions against Russia will curtail global supplies and stifle growth, are rising; Crude price rallying on lower supply despite oil release from IEA
image for illustrative purpose
Cost of War
- Crude oil price rose 15% in 2 days
- Russia is the 3rd largest producer of crude oil
- Highest level since July 2014
New Delhi: Lower supplies, as well as hostilities between Russia and Ukraine, pushed Brent crude oil price to nearly an 8-year high on Wednesday. Besides, robust global demand is expected to keep the Brent-index crude oil price high. On Wednesday, the Brent-indexed crude oil prices rose to over $111 per barrel on Wednesday. It had risen to $102 per barrel on Tuesday from Monday's $98 per barrel mark.
Consequently, crude oil prices have surged by nearly 15 per cent in the last two days on fear of tight supplies. At present, Russia is the third largest producer of crude oil in the world. It is feared that sanctions against Russia will curtail global supplies and stifle growth.
"Global crude oil prices extended gains with Brent oil prices trading near the highest levels since July 2014, at $111 per barrel. The western sanctions on Russia have made several traders opt out from Russian oil. The market is rallying on lower supply despite oil release from IEA, as release of 60 million barrels will account for only 6 days of Russian supply," said Tapan Patel, senior analyst (commodities), HDFC Securities.
Anuj Gupta, V-P (research) at IIFL Securities, adds: "We are expecting it may trade further higher towards $115 to $125 levels."
In addition, Kshitij Purohit, Lead of Commodities and Currencies CapitalVia Global Research: "There are concerns about potential global supply disruptions from a tightening set of sanctions imposed on Russia. Brent markets have followed suit and we are now trading above $111."
Oil futures jump on spot demand
Crude oil prices rose by Rs 436 to Rs 8,341 per barrel on Wednesday as participants widened their positions on a firm spot demand. Globally, West Texas Intermediate crude oil was up 6.6 per cent to $110.24 per barrel, while Brent crude traded 6.41 per cent higher at $111.7 per barrel in New York. On the Multi Commodity Exchange (MCX), crude oil for the March delivery traded higher by Rs 436 or 5.52 per cent at Rs 8,341 per barrel in 13,911 lots. Analysts said raising of bets by participants kept crude oil prices higher in the futures trade.
