Crude oil futures closed higher on Friday (March 18) after choppy trading this week. Concerns are growing about a shortage in oil markets following sanctions imposed on Russia for oil exports.
- WTI crude futures were up $1.72, or 1.7%, at $104.70 a barrel, but were down 4.2% for the week.
- BRENT crude futures were up $1.29, or 1.2%, at $107.93 a barrel, but were down 4.2% for the week.
At the beginning of this week, the mood in Ukraine brightened somewhat following reports of progress in the peace talks between Russia and Ukraine. This was dampened again at the end of the week after the Russian side revised this.
Crude oil prices were driven by concerns about tight oil supply as traders avoid buying Russian oil, and by lower oil inventories.
Low OPEC+ production in February also contributed to the rise in crude oil prices.
The oil markets were also supported by the International Energy Agency’s (IEA) warning of a shortage in the oil market. The sanctions against Russia will prevent Russia from exporting a total of 3 million barrels of crude oil per day in April. Oil demand is expected to fall by only 1.2 million barrels per day. The IEA also expects global economic growth to suffer from rising commodity prices.
U.S. oil production remains limited following Russia’s invasion of Ukraine. U.S. oil drilling contractor Baker Hughes said the active U.S. oil and gas rig count fell by three this week to 524.
Oil prices are also being pressured by demand concerns following the resurgence of Covid 19. A surge in China’s main tech city Shenzhen has led to a 7-day lockdown.
The spot Market is Closed
Saturday, March 19, 2022