- Oil on Wednesday briefly reached $90 per barrel, the highest since 2014.
- It is due to increasing tensions between Russia and Ukraine.
Oil on Wednesday briefly reached $90 per barrel, the first time since 2014, due to rising tensions between Russia and Ukraine and ongoing concern about tight supplies and strong demand being a recipe for trouble later this year, says an article published in Ship&Bunker.
After Russian President Vladimir Putin threatened to take “appropriate” action if the U.S. didn’t offer constructive solutions to the Ukraine issue, Brent surpassed $90 then settled up $1.76 at $89.96 per barrel: West Texas Intermediate settled up $1.75 to $87.35 per barrel.
Specifically, analysts are worried that a Russian invasion into Ukraine would cause interruptions in the former country’s gas supply to Europe, however, Tony Blinken, U.S secretary of state, said his country will make sure global energy supplies will remain intact should an invasion occur.
Paul Sheldon, chief geopolitical advisor. analytics, at S&P Global Platts, remarked, “Most likely flows will continue, but the risks are not negligible that something could affect physical balances.”
Still, the U.S. like other countries is challenged to make up for potential shortfalls: it is reportedly over 1 million barrels short of its record level of daily output, and U.S. refined product supplied – a measure of demand-surged again in the latest week, putting the four-week moving average at 21.2 million barrels per day and ahead of pre-pandemic trends.
Rapidan energy group
All this led Bob McNally, founder, and president of Rapidan Energy Group, to state on Wednesday that oil prices could reach $150 later this year, “but we’re not tight enough yet” and more likely prices will stay in the $80s.
Whether or not this proves true, prices are bound to escalate, Goldman Sachs said on Wednesday the firm wrote to clients. “Against the backdrop of the tightest inventory levels in decades, low spare capacity, and a much less elastic shale sector, this points to the skew of large energy price moves to shift to the upside, reinforcing the case for a rising allocation to commodities in portfolios.”
In other oil-related news on Wednesday, the death toll from a January 14 fire at the Mina al Ahmadi oil refinery in Kuwait was raised to four after two injured workers died of their wounds. according to the Kuwait National Petroleum Company.
Also, Chevron Corp shares on Wednesday traded as high as $134.51, above the previous record of $133,60 set in January 2018 and beating the target price set by some analysts.
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