Oil prices extended their gains to more than 7% during Thursday’s trading, with US crude breaking the $102 per barrel barrier, amid fears of a supply shortage.
Crude’s performance follows warnings from the International Energy Agency that markets could lose 3 million barrels per day of Russian oil and refined products starting in April.
The International Energy Agency said, in a report, on Wednesday, that the supply loss will be much larger than the expected drop in demand by one million barrels per day due to higher fuel prices.
Oil Prices Today
The price of futures contracts for West Texas Intermediate crude – for delivery in April – rose by about 7.5%, to reach $102.51 a barrel.
The price of Brent crude futures – for delivery in May 2022 – also increased by 8%, recording 106 dollars per barrel.
Oil prices ended their trading on Wednesday with a decline for the third consecutive session, with the release of the US stockpile report, and fluctuated, during Wednesday’s trading, between ups and downs, while anticipating developments in demand and supply in light of the Russian invasion of Ukraine.
US Oil Stocks
The decline in prices in the previous session was due to a rise in oil inventories in the United States by 4.3 million barrels in the week ending March 11 to 415.9 million barrels, exceeding analysts’ expectations for a decline of 1.4 million barrels, said Wang Xiao, chief researcher at Jyutai Junan Futures Company. barrel.
“Questions about how much Russian oil will continue to fluctuate and uncertainty about how badly to destroy crude demand will keep energy markets jittery,” Edward Moya, chief market analyst , wrote in a note.
The oil market largely ignored the US Federal Reserve’s move, on Wednesday, to raise interest rates by a quarter of a percentage point, as expected.
Market sentiment was boosted somewhat after China pledged policies to boost financial markets and economic growth, while a drop in new coronavirus cases in China spurred hopes that the authorities might lift travel bans and allow factories to resume production in cities under lockdown.
With oil prices expected to rise, the Energy Information Administration raised its estimate of average retail gasoline prices in the United States.
Gasoline prices are expected to average $4 a gallon this month, and will continue to rise, recording $4.12 a gallon in May.
For this year’s total, the EIA estimates that US gasoline prices will average $3.79 a gallon in 2022, which would be the highest since 2014, adjusted for inflation, before falling back to $3.33 a gallon next year. .
It is worth noting that gasoline prices in America last year reached their highest level since 2014, after averaging more than $3 a gallon.