Crypto Legal Network Logo

Oil Prices Rise on Threat of Russian Supply Cuts

oil prices rise on threat of russian supply cuts

On Monday, oil prices saw an upward trend following their initial dip as investors considered the potential impact of Russia’s crude production cutback and short-term demand in light of America’s impending inflation data. Brent oil prices for April rose to $86.61 a barrel while U.S. crude increased by 42 cents to reach $80.14 per barrel – representing a 0.3% and 0.5% gain, respectively.

Russia Announced It Will Reduce Production Against Western Sanctions

Phil Flynn, an analyst at Price Futures Group, noted that the foundation for oil remains robust. “With China reopening their economy again,” he said, “we’ll observe more demand and combined with Russia and OPEC having either lower or equivalent supply – which is constructive.” On Friday, crude oil prices saw a considerable upswing to reach two-week highs after Russia declared that they would reduce production by 500 thousand barrels per day (bpd) as retribution against Western sanctions due to the conflict in Ukraine.

The United Arab Emirates’ energy minister recently declared that no extra OPEC+ gathering was necessary at this time, as the oil sector appeared to be in equilibrium. Last week saw a significant surge of more than 8% for both Brent and WTI contracts, with optimism surrounding China’s elimination of COVID-related restrictions in December leading the charge.

oil prices rise on threat of russian supply cuts

Increasing Azeri and US Oil Production May Provide Some Relief

On Monday, U.S. main stock indices soared due to the Federal Reserve’s decision to raise interest rates to regulate inflation. However, this move has caused worries that economic activity and oil demand could decrease due to these changes. According to Matthew Ryan – head of the market strategy at Ebury financial services firm – “It is impossible not to recognize the significance of this single piece data since traders and Fed alike have been closely monitoring gradual downward trend from past few months.”

On Monday, a shipment of Azeri crude left Ceyhan port in Turkey, marking the first departure since the February 6th earthquake. The port acts as both an oil storage and loading point for pipelines from Azerbaijan and Iraq. To further ease supply concerns, U.S shale production is anticipated to reach its peak in March, according to recent reports from the Energy Information Administration on Monday! These developments could help lower oil prices globally.

You might check: Introduction to BlueMove Token: What is it and Why Does it Matter?

Read Previous

The Luxury Sector Looks Like It’s Starting to Rebound with China’s Reopening

Read Next

Robert Kiyosaki Responds To What Charlie Munger Said About Cryptocurrencies

Leave a Reply

Your email address will not be published. Required fields are marked *