Oil prices reached a new high in more than seven years on Wednesday, thanks to the ongoing crisis on the Ukrainian border and some worrying indicators in the US stock report.
The price of a barrel North Sea Brent for March delivery gained 1.99% to end at $ 89.96. Earlier, for the first time since October 2014, it reached $ 90, with $ 90.47.
the barrel of West Texas Intermediate (WTI) for March, meanwhile, rose 2.04% to $ 87.35, although it reached $ 87.95 during the day.
“The market integrates the risk of new geopolitical episodes on the Russian-Ukrainian border,” said Bart Melek, head of commodity strategy at TD Securities, in a note.
In a letter delivered to Russia on Wednesday, US refused to join Ukraine NATO, the main Russian demand for a solution to the crisis.
A meeting of Russian, Ukrainian, French and German negotiators on Wednesday in Paris made no concrete progress.
The report of reserves in the United States also did not reassure the market.
Commercial crude oil shares in the United States rose much more than expected last week, according to figures released Wednesday by the US Energy Information Agency (OIE).
In the week ending January 21, crude oil inventories rose by 2.4 million barrels (mb), more than double what analysts had expected for an increase in million barrels, to 416.2 mb.
But “if we did not have the strategic reserves, it would look worse,” said Bill O’Grady of Confluence Investment Management.
Strategic reserves were down 1.2 mb in the week ending January 21st.
The “other factor” that caused operators to respond “is that production is down,” Bill O’Grady said. The volume went from 11.7 million barrels per day (mbd) per day to 11.6 mbd, far from its pre-pandemic level of 13 mbd.
“We’re in a strange world where prices are rising, but that’s not driving up production,” O’Grady summed up, “so the only way we are going to balance the markets is by reducing consumption.”
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Reference-www.eleconomista.com.mx