© Reuters. Photo of the industrial facilities of the PCK Raffinerie refinery in Schwedt/Oder, Germany, March 7, 2022. The company receives crude oil from Russia via the ‘Friendship’ pipeline. REUTERS / Hannibal Hanschke
By Ahmad Ghaddar
LONDON -Oil prices rose 6% on Thursday after the International Energy Agency (IEA) said three million barrels per day (bpd) of Russian oil and products could be shut down from next month and despite the decision. interest rate hike by the US Federal Reserve.
The loss in supply will be much larger than the expected drop in demand of 1 million bpd due to higher fuel prices, the IEA said in a report on Wednesday.
Oil futures prices rose $6.41, or 6.5%, to $104.43 a barrel by 1205 GMT. U.S. West Texas Intermediate (WTI) crude rose $5.95, or 6.3%, to $100.99 a barrel.
Both contracts fell the previous day, following an unexpected jump in stockpiles and signs of progress in the Russia-Ukraine peace talks.
Morgan Stanley (NYSE:) has raised its Brent oil price forecast by $20 for the third quarter of 2022 to $120 per barrel, predicting a drop in Russian production of about 1 million bpd from April.
The bank said the drop would offset a downward global demand correction of around 600,000 bpd.
“Both supply and demand are being affected but supply is now being impacted more and the oil market will tighten over the next two quarters,” said SEB bank.
According to the US Energy Information Administration, prices fell in the previous session on news that US oil inventories increased by 4.3 million barrels in the week to March 11 to 415.9 million barrels. Analysts expected a drop of 1.4 million barrels.
The oil market largely rejected the US Federal Reserve’s decision on Wednesday to raise interest rates by a quarter of a percentage point, as expected.
Sentiment was somewhat boosted after China pledged policies to boost financial markets and economic growth while a drop in new COVID-19 cases in China boosted hopes of a shutdown. will be removed to allow factories to resume production.
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