The price of oil is rising on Wednesday afternoon due to the high probability of problems with the supply of raw materials. At the time of writing the review, the price of June Brent futures rose by 1.74%, reaching $106.46 per barrel. May WTI futures rose 1.5% to $101.9.
The trigger for the renewed growth of quotes was the statement of Russian President Vladimir Putin that Ukraine does not want to fulfill a number of agreements that were adopted by the warring parties earlier in Istanbul during face-to-face negotiations. The conflict between Russia and Ukraine is dragging on, so the issue of problems in the supply of Russian oil to the world market is relevant again today. It is obvious that the protracted conflict in eastern Europe favors the prices of black gold.
On Tuesday, information also appeared indicating a possible drop in Russian supplies. Thus, OPEC analysts in the next monthly MOMR report lowered the estimate of Russian production in 2022 by 530,000 barrels per day. The US Department of Energy expects that by the end of next year, oil production in Russia will decrease by 1.7 million barrels per day.
According to sources of the Reuters agency, oil and gas condensate production in Russia in the period April 1-11 decreased by 6%, that is, by 0.7 million barrels per day. However, it is worth saying that there is no official data on this issue yet, since the CDU of the Fuel and Energy Complex has not published operational monthly production data since this month.
It is important that today's price volatility in the oil market is beyond the control of OPEC countries, as it is provoked mainly by political factors. This was announced by the Secretary General of OPEC in an interview with the European Commissioner for Energy. He also added that Russia's contribution to world supplies is 7 million barrels per day, and OPEC will not be able to replace this volume of energy resources in any way. This statement by the Secretary General of the energy alliance can be regarded as a delicate refusal by Western European countries to support political pressure on Russia through energy trade. The Secretary General hinted that accelerated oil production in the Persian Gulf is meaningless, therefore no one will carry it out.
But the United States has managed to make progress in this regard. Indian Oil Corp (IOC) excluded Urals oil and other high-sulfur grades in its latest purchase. This happened after the US President had a personal conversation with the Indian Prime Minister.
However, we cannot exclude the fact that the IOC could be guided not so much by Biden's recommendations as by technical reasons. It will be possible to assess the situation only when Indian energy companies make new purchases of raw materials. After all, the price of Urals allows you to get a discount of more than 30% to the benchmark Brent brand, so it would be extremely illogical for India to abandon Russian oil.
At the same time, the demand for energy is about to rise significantly, as evidenced by the lifting of a number of quarantine restrictions in China. This news led to the fact that yesterday oil futures rebounded by 6%. However, it is not yet possible to say with certainty how long quarantine measures will remain in Shanghai and whether there will be new outbreaks of the virus in other cities. There is a high probability that many restrictions will be lifted by the end of April.
