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Strong beginning of the week for oil prices

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Miguel A. Rodriguez
Miguel A. Rodriguez
21 March 2022
Russia-Ukraine negotiations haven’t reached a consensus yet, pushing oil prices higher

During the Asian trading hours, the crude oil and Brent oil prices jumped after the Russia-Ukraine talks didn’t show progress. Oil prices have been volatile in the past weeks, reaching record highs in March before diving more than 20% last week, below $100 a barrel.

The Russia-Ukraine situation has led to fears over supply disruptions because of US sanctions on Russian oil & gas. The UK and European Union announced that they would also phase out Russian fossil fuel. According to data from Goldman Sachs, in 2021, Russia supplied 11% of global oil consumption and 17% of global gas usage, and 40% of Western European gas consumption. Later this week, European Union governments and US President Joe Biden are set to meet, as the former considers an oil embargo on Russia.

Tight supply spooks the markets, with the International Energy Agency (IEA) calling for “emergency measures” to reduce oil usage. In its 10-point plan, the IEA suggests reducing demand by lowering the speed limit for vehicles, working from home for three days/week, and avoiding air travel for business. “We estimate that the full implementation of these measures in advanced economies alone can cut oil demand by 2.7 million barrels a day within the next four months, relative to current levels,” IEA officials stated.

Brent oil and crude oil traded at $111.46 per barrel and $108.25/barrel.

Sources: cnbc.com, reuters.com

This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.