Oil ends tough week higher

(New York) Oil prices ended higher on Friday, after three consecutive sessions of decline, the effect of the announcement of the massive use of reserves in several countries dissipating.

Posted at 4:37 p.m.

The price of a barrel of Brent from the North Sea for delivery in June rose by 2.18%, to end at 102.78 dollars.

In New York, the barrel of West Texas Intermediate (WTI), the main American variety, with maturity in May, gained 2.32% and closed at 98.26 dollars.

After moving up slightly for most of the day, prices accelerated at the end of the session, with WTI even approaching the threshold of 100 dollars a barrel.

For Andy Lipow, of the firm Lipow Oil Associates, this boost is due to purchases of cover made by operators who bet on the decline in prices.

With the approach of the weekend and “with the rise of violence” in Ukraine, these speculators did not want to remain exposed to an event that could cause prices to rise sharply when trading resumes on Sunday evening.

Ukraine fears a Russian offensive in the east of the country in the coming hours.

Suffocated for a good part of the week by the prospect of the marketing of 240 million barrels drawn from the reserves of the members of the International Energy Agency (IEA), prices had also suffered from the rise of the dollar and massive lockdowns in China.

Still according to Andy Lipow, after the new set of sanctions announced Thursday against Russia, “the market still anticipates that the European Union will reduce its imports (of oil) in one way or another”.

In a resolution adopted on Thursday, the European Parliament called for a “total and immediate” embargo on imports of oil, coal, nuclear fuel and gas from Russia.

The 27 agreed Thursday on the principle of a coal embargo, which will take effect in early August, but failed to agree on gas or oil.

“We know that the EU as a whole is probably not going to go there (and suspend oil imports), but some countries might,” argued Andy Lipow.

Therefore, the market “is looking for alternatives to Russian oil”.

According to JPMorgan analysts, Russian oil production “appears to show early signs of slowing”. It fell, according to them, to 10.6 million barrels daily, against 11 on average in March.

For JPMorgan, this deceleration could be linked to the “difficulty of finding buyers” for Russian crude, but also for its refined products.


source site-55