Daily Times

Crude oil prices rose on Friday as supply concerns and geopolitical tension in Europe got the upper hand over the economic fears dogging financial markets as inflation soars. As of 1230 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $2 (+1.86 percent) to reach 109.45 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, increased to $108.15 a barrel, up by $2.02 (+1.90 percent). Both benchmark contracts were, however, on track to post declines for the week, with Brent set to drop more than 3 percent and WTI more than 2 percent.

The price for Opec basket was recorded at $109.30 a barrel with an increase of 0.26 percent. The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey. Arab Light was available at $107.90 a barrel with an increase of 2.83 percent and the price of Russian Sokol jumped to $97.62 a barrel with a 2.88 percent gain.

The market is continuing to be pushed and pulled by the prospect of a European Union ban on Russian oil sapping supply and concerns about demand being dented by weaker global growth, inflation and China’s Covid curbs.

An International Energy Agency report on Thursday highlighted the duelling factors in the market, saying rising oil production in the Middle East and the United States and a slowdown in demand growth are “expected to fend off an acute supply deficit amid a worsening Russian supply disruption”. The agency said it saw output from Russia falling by nearly 3 million barrels per day (bpd) from July, or about three times more than is currently displaced, if sanctions for its war on Ukraine are expanded or if they deter further buying. A pending European Union ban on oil from Russia, a key supplier of crude and fuels to the bloc, is anticipated to further tighten global supplies. The EU is still haggling over details of the Russian embargo, which needs unanimous support. However, a vote has been delayed as Hungary opposes the ban because it would be too disruptive to its economy.