Oil prices rebounded as the war in Ukraine neared its first month and investors watched geopolitical tensions in the Middle East.
The US WTI oil price in the first session of the week rose above 106 USD/barrel, the third day of increase after 2 weeks of sharp decline. The price of Brent oil also rose to 110 USD/barrel after falling below 100 USD/barrel last week.
The difference between the price of WTI oil and Brent oil was also significantly shortened, to about 2.33 – 3.5 USD.
Oil prices rebounded after falling below $100/barrel.
Turkey says Moscow and Kiev are moving closer together in talks to reach a ceasefire and diplomatic solution, even as Ukraine says Russia has switched to heavy weapons. more destructive.
The global oil market was thrown into chaos when Russia sent troops to Ukraine, leading to the US and Europe imposing sanctions on Moscow, alienating buyers of Russian goods. Earlier this month, US WTI crude hit $130 a barrel, its highest since 2008, before turning lower.
“Volatility is calming down a bit,” said Stephen Innes, manager at SPI Asset Management Pte. Supply risks are not as bad as once thought, China’s Covid-19 zero strategy remains uncertain and the market is watching to see if OPEC will increase production. There’s a lot to consider.”
Soaring crude prices and inflation have put pressure on top importers to increase supply, including members of the Organization of the Petroleum Exporting Countries. Over the weekend, Japan urged the United Arab Emirates (UAE) to increase exports, and wanted the UAE to contribute to stabilizing the market.
The sharp increase in oil prices has helped Saudi Aramco to earn a full year of 2021 net profit more than double compared to the previous year. Specifically, Aramco’s earnings report said that the group’s net profit in 2021 was 110 billion USD, up 124% compared to 49 billion USD obtained in 2020.
Traders are also keeping a close eye on China’s efforts to contain the latest Covid-19 outbreak and its effects on energy demand. President Xi Jinping pledged to reduce the economic impact of strict containment measures, while reiterating his commitment to the Covid-Zero policy. Last week, China reported the first number of Covid-19 deaths since January 2021 and the number of new infections in Shanghai hit a record.
Poor supply prospects and high prices have prompted the International Energy Agency (IAEA) to call on countries to limit private car rides, increase use of public transport, and limit vehicle speeds as a way to cut back. 2.7 million barrels of oil per day, without having to rely too much on Russian oil.
But lingering concerns about the Covid-19 pandemic could undermine people’s willingness to share cars and even use public transport. Passenger numbers on metro networks in most major cities are still far below pre-pandemic levels, and governments are looking to reduce their financial support.
Reference: Bloomberg
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