Brent Crude hits 113$ over fear of short supply
By Uthman Salami
Owing to outages in Libya and concerns about the loss of some Russian supply which are currently being discussed by the EU, oil rose early on Monday.
The increased price of oil to the levels it was at the end of March, just before the United States announced its largest ever release of strategic crude stocks to curb rising crude and gasoline prices, could be seen as a result of fear over the development in Russia, and recently Libya
As at the time of filing this report on Monday, WTI Crude was up by 0.82% at $107.86, and Brent Crude had risen by 1.10% at $112.90.
Both benchmarks have now returned to the levels they were trading at just before the March 31 announcement from the White House that the Biden Administration would release 180 million barrels of oil from the Strategic Petroleum Reserve (SPR) over six months “to respond to Putin’s price hike at the pump.”
“After consultation with allies and partners, the President will announce the largest release of oil reserves in history, putting one million additional barrels on the market per day on average – every day – for the next six months,” the White Houses said at the time.
The chunk of SPR release sent stave off the increase of oil prices for several days in early April.
Meanwhile, stakeholders had shrugged it off, noting that the emergency stocks release would do nothing to fill the structural deficit in the oil market after years of low investments in new production.
Reports of the EU discussing a Russian oil embargo and this weekend’s outages in Libya pushed shed oil higher, trumping the SPR release and concerns about a slowdown in demand in China as it is back in lockdown mode for millions of residents as part of its “zero COVID” policy.
While fears of a slowdown in the world’s top crude oil importer dominated market sentiment earlier this month, Libyan outages tipped the mood to slightly bullish early on Monday.
Libya’s largest oilfield, Sharara, has shut down production after a group of individuals pressured oil workers, the National Oil Corporation (NOC) said , declaring force majeure on the oilfield.
