Crude oil prices were trading at highs for nearly three weeks on April 18, amid fears of supply disruptions due to the ongoing Ukrainian crisis.
Brent crude oil futures hit a high of $ 113.80 per barrel, the lowest level since March 30th. US West Texas intermediate futures reached $ 105.55 per barrel, also the highest level since March 30th.
Russia’s oil production continues to decline this month. In the first half of April 2022, Russia’s oil production fell 7.5% compared to March. OPEC was unable to increase production by 253,000 barrels (bpd) per day in March, as permitted by the OPEC + transaction. Instead, production for the month increased by 57,000 barrels / day.
OPEC + is an alliance between OPEC and other oil-producing countries, including Russia.
Kazuhiko Saito, chief analyst at Fujitomi Co., Ltd., said, “This week’s oil market tends to be bullish as additional supplies from major oil producers are limited to offset the decline in flows from Russia. It will continue. ” CNBC..
“The soaring US kerosene prices are also lagging behind the recent rise as the US oil market is expected to tighten due to increased export demand to Europe,” Saito said.
The International Energy Agency (IEA) has recently announced Report Russia’s oil supply will decline by 1.5 million barrels / day in April and eventually by 3 million barrels / day in May. However, it is hoped that other oil-producing countries will prevent a sharp deficit due to an increase in production.
Confusion of Libya Oil supply has also put upward pressure on the market. The country’s National Petroleum Corporation warned on April 18 that political turmoil prevented it from fulfilling its oil supply obligations from the Sharala oil field and Zuetina Terminal. Production from the Elfir oil field had previously been suspended.
The upward pressure on oil prices is countered by concerns about China’s growth. The country’s economy slowed in March as exports, consumption and real estate were hit. The government’s very restrictive COVID-19 restrictions have closed factories, clogged ports and impacted supply chains.
“A serious new blockade in the midst of a surge in the Covid case in China has lowered expectations for global oil demand in the second quarter of 2010 and for the full year, weaker than the expectations of OECD countries at the beginning of the year. Demand has joined the decline, “the IEA report said.
As a result, the agency has reduced its estimated global oil demand in 2022 by 260,000 barrels per day. Global demand is expected to increase again this year by 1.9 million barrels / day compared to 2021.
Reuters contributed to this report.
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Naveen Athrappully is a news reporter on business and global events in The Epoch Times.