Oil: Towards its highest weekly increase since mid-2020

Οil prices are moving towards their highest weekly increase, since mid-2020, with the WTI rising by 18% and Brent by 14%, having reached its highest level in a decade this week.

Brent futures for May reached $114.23 per barrel, today, and settled at $112.52, increased by $2.06 or 1.9% at 5:26 Greek time. Yesterday, it dropped by 2.2%, on Thursday.

The US WTI for April rose by $2.37 or 2.2% to $110.04 per barrel, after reaching a high of $112.84 earlier. Yesterday, it had gone down 2.6%.

The fears that Western sanctions on Russia over the conflict in Ukraine will halt shipments from Russia, which is the world’s largest exporter of crude and petroleum products, are fuelling price increases.

Trade activity for Russian crude oil has slowed as buyers hesitate to make purchases due to sanctions, while pressure is mounting on the US leadership to ban Russian oil imports.

“The escalation of the war in Ukraine has not only caused geopolitical risks, but adds to the already heightened inflation concerns and increases risk premiums,” RBC Capital analyst, Christopher Looney, told Reuters.

Of course, a coordinated release of 60 million barrels from developed countries’ stockpiles could boost global demand.

In this context, Japan stated today that it plans to release 7.5 million barrels of oil.

Commonwealth Bank of Australia analyst, Vivek Dar, estimates that Brent will average $110 a barrel, in the second and third quarters of this year, but points out that there is a risk, in the short term, that prices will exceed projections and even reach $150 in Brent futures.