Oil Prices Steady Near Four-Month Highs
Stability in Oil Markets
Oil prices remained relatively stable on Tuesday, hovering near four-month highs after breaking out of a range-bound trading pattern last week. However, concerns about increased exports from Russia emerged, particularly in the face of Ukrainian attacks on refineries.
Price Movements
The futures contract for May delivery dipped by 12 cents to $86.77 a barrel, while U.S. West Texas Intermediate (WTI) prices saw a decrease of 14 cents to $82.02. The WTI April contract, set to expire on Wednesday, experienced an 8-cent drop to $82.64.
Market Trends
Both benchmarks hit highs not seen since November in the previous session, driven by reduced crude exports from Saudi Arabia and Iraq, alongside indications of increased demand and economic growth in China and the United States.
Expert Analysis
UBS analyst Giovanni Staunovo noted that surprising positive oil demand data and the extension of voluntary OPEC+ cuts until the end of June have provided support for prices. He predicts a trading range of $80-90 per barrel for Brent this year, with a forecast of $86 per barrel by end-June.
Impact of Ukrainian Attacks
Recent Ukrainian drone attacks on Russian oil infrastructure have led to a rise in exports from Russia, potentially reducing Russian crude runs by up to 300,000 barrels per day. This, combined with scheduled maintenance closures, has put pressure on prices.
Market Uncertainty
Uncertainty surrounding U.S. interest rates ahead of the Federal Reserve policy meeting this week has also weighed on prices. DBS Bank’s Suvro Sarkar highlighted the need for consolidation as markets await signals on rate cuts, attributing recent price increases to a higher geopolitical risk premium post-attacks on Russian refineries.
