The price of Brent and West Texas Intermediate (WTI) crude oil for the front-month futures contract has risen to more than $100 a barrel (b) as a result of news that Russian forces invaded Ukraine once more on Thursday, February 24.
After climbing and settling above USD100/b on February 28, the front-month Brent contract price finished just below USD115/b on March 2. The last time the price of Brent crude oil exceeded $100/b was in late 2014. After initially settling above USD100/b on March 1, the front-month WTI contract price closed above USD110/b on March 2.
A type of crude oil from the North Sea in Northwest Europe known as Brent is frequently used as a benchmark globally. The benchmark for crude oil in the United States is West Texas Intermediate. These benchmarks’ recent trading has been more erratic than in the past. For instance, the price of Brent crude oil fluctuated between a high of US$105.79 per barrel and a low of US$97.56 per barrel on February 24. This intraday price range of US$8.23 per barrel is approximately four times the average range in 2021. The range went beyond USD8/b only once more since January 2021, on November 26, in response to the World Health Organization’s discovery of the coronavirus Omicron strain.
The market of crude oil
On February 25, the price of Brent crude oil fell, but on February 28, it rose as a result of events in the Ukraine-Russia conflict and fresh sanctions imposed on Russia over the weekend. The market of crude oil over the previous week has been significantly impacted by recent news regarding Russia’s continued invasion.
After the United States and Saudi Arabia, Russia is the world’s third-largest producer of petroleum and liquid fuels. Additionally, it exports a lot of crude oil. The geopolitical danger associated with a Russian invasion of Ukraine that began in mid-January 2022. It has increased and made oil prices more volatile. Global oil prices have also been under pressure due to slower growth in oil production. It increased petroleum consumption as the COVID-19 pandemic has started to abate.
According to the chairman of the state-owned oil pipeline monopoly, Rossiya-24 TV, Transneft has received requests for oil from Poland and Germany for delivery in 2023. He also stated that deliveries via the southern spur of the Druzhba pipeline are anticipated to remain stable in 2019. The Druzhba pipeline is still free from sanctions. Despite the EU’s promise to stop purchasing Russian oil through marine lines. As of December 5 and Western countries’ price limitations on Russian crude oil. The remarks from Transneft contradict reports. They were from last month that Poland intended to back out of an arrangement to purchase Russian crude. mrchub.com