Oil up more than 5%, as Russia-EU energy quarrel intensifies
Oil prices rose more than 5% on Wednesday after Russian gas flow to Europe and Russia approved several European gas companies, increasing uncertainty in the world energy market.
Oil and gas prices have risen since Moscow invaded Ukraine in February and the United States and allies then imposed severe sanctions against Russia. Rough trade has been limited, and Russia has threatened to cut gas supply to Europe, even though it has quit that step.
The flow of Russian gas to Europe through Ukraine dropped a quarter after Kyiv stopped using the main transit route, blaming interference by occupying Russian troops. This is the first time exports through Ukraine have been disturbed since the invasion.
The move caused a concern that similar disturbances could follow even because prices had jumped. Russia on Wednesday approved 31 companies based in countries that impose sanctions on Moscow after Russia invaded Ukraine in February.
Brent crude oil completed $ 5.05, or 4.9%, to $ 107.51 per barrel, while the US West Texas intermediary crude rose $ 5.95 per barrel to $ 105.71, an increase of 6%.
The European Union has threatened an embargo full of Russian oil, even though negotiations continue. Because of the role of Russia as the largest exporter of crude oil and fuel, disruption – which is expected to get worse – has caused the market to tighten throughout the world, especially for processed products such as diesel.
Prices will continue to rise especially if the European Union reaches an agreement to remove the purchase of Russian oil during this year’s balance,” said Andrew Lipow, President of Lipow Oil Associates in Houston.
EU is still bidding embargoes in Russian oil, which according to analysts will increasingly tighten the market and divert trade flow. Voting requires support in a round voice, but has been postponed because Hungary has dug up his heel in opposition.
The latest numbers about the U.S. Inventory underline the dynamics that encourage higher prices. Although the stock of crude oil. Grows more than 8 million barrels – most of it due to the release of other strategic reserves – gasoline stocks dropped 3.6 million barrels and distillation stocks also fell.
Purification capacity has been reduced in the United States and the country has increased exports to meet the demands of overseas buyers. So far in 2022, the United States exported, on the internet, around 4 million barrels of fuel every day. [EIA/S]
The number of utilization rates is 90% not like before because the overall capacity is down,” said Tony Headrick, an energy market analyst at Hedging CHS. “We see that the drawer cannot meet the demand for gasoline.”
The price of crude oil has jumped in 2022 because the Russian invasion of Ukraine was added to supply problems, with Brent reaching $ 139, the highest since 2008, in March. Concerns about the growth caused by Chinese Covid sidewalks and U.S. Interest Rate Increases. has pushed the decline this week.