Oil prices hit $110 per barrel, OPEC+ to meet

/ Financial News / Wednesday, 02 March 2022 10:24

Oil prices witnessed seven-year highs as a result of uncertainty over tight oil supplies as Russian banks faced heavy sanctions over Ukraine conflict, triggering demand for alternative oil sources.

Brent crude futures gained $5.30, or 5%, to $110.23 a barrel, a level last seen in 2014. US West Texas Intermediate (WTI) crude futures were up $5.02, or 4.8%, to $108.41, after hitting the highest since September 2013. Russian oil exports account for around 8% of global supply

Meanwhile, Exxon Mobil has become the latest to exit Russia following on the footsteps of bp and Shell.

Western powers have not imposed sanctions on energy exports directly so far; however, US traders in New York and the US Gulf are excluding Russian crude.  Saudi Arabia is likely to hike prices of crude for Asia in April, according to the traders.

A temporary relief on the supply front came in the form of coordinated release of 60 million barrels of oil by International Energy Agency member countries that put a lid on market gains. Commercial oil stockpiles are at their lowest since 2014, the IEA said.

The Organization of the Petroleum Exporting Countries, Russia and allies, together known as OPEC+, are due to meet, where they are expected to stick to plans to add 400,000 barrels per day of supply each month.

The latest data from the American Petroleum Institute industry group showed US crude inventories fell by 6.1 million barrels for the week ended Feb. 25.

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