Daily Times

Crude oil futures surged on Wednesday amid consistent supply concerns as some buyers avoid oil from Russia, the world’s second-largest oil exporter. As of 1320 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.88 (+0.77 percent) to reach $114.44 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, increased to $110.79 a barrel, up by $1.02 (+0.93 percent).

The price for Opec basket was recorded at $114.96 a barrel against $115.95 a barrel a session earlier, showing a decrease of 0.85 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 $111.53 a barrel with an increase of 1.52 percent and the price of Russian Sokol jumped to $101.16 a barrel with a 1.94 percent increase.

Despite worries about threats to the global economy, a main theme of the Davos meeting this week, tight supply supported the oil prices. Global economic growth is precipitously declining under the collective impact of rising interest rates, Chinese Covid flare-ups and the European war. Beijing is stepping up quarantine efforts to end its month-old outbreak while Shanghai’s prolonged lockdown is due to be lifted in a little more than a week. In a step that will further tighten the market, the European Union is moving closer to agreeing a ban on Russian oil imports.

With explicit bans on importing Russian crude in the US and UK, and oil companies reluctant to buy even without formal legal obstacles, self-sanctions are still causing supply shortages. France’s new foreign minister said on Tuesday she was optimistic that those still opposed to a new EU sanctions package, which would phase out Russian oil imports to the bloc, could be convinced, and that the bloc would strike a deal that would have the effect of curtailing global supply.