Oil rally halts Thursday morning as prices dip slightly
Oil prices have proven unstable in recent days with large jumps over the last three days succeeded by a fall Thursday morning, writes Bloomberg News.
A barrel of European benchmark crude Brent costs USD 121.00 Thursday morning against USD 121.49 Wednesday afternoon. Meanwhile, US counterpart West Texas Intermediate trades at USD 113.94 against USD 114.59 Wednesday afternoon.
US President Joe Biden will arrive in Brussels Thursday to meet with EU leaders and discuss additional sanctions against Russia. According to Bloomberg News, the US and the EU are close to an agreement, which will render Europe less dependent on energy imports ex-Russia. The agreement will primarily focus on Russian natural gas.
The US and the UK have already halted all energy imports from Russia, but Europe faces more issues cutting ties completely due to greater reliance on such. As the war in Ukraine rages on, Russia's large energy sector is used as a weapon by both sides. Most recently, Russia has forced buyers of energy to pay in rubles, sending the prices further up.
"There are worries around both supply and demand, which may keep prices rather volatile, but if fresh sanctions are slapped on Russia, we're looking at another leg up," says senior analyst at IV Investment in Seoul Will Sungchil Yun to Bloomberg News.
Trafigura Group projects oil prices going as far up as USD 150 per barrel.
The demand side is affected negatively by the largest Covid-19 outbreak in China since the beginning of the pandemic, dampening Chinese consumption and global oil prices.
Moscow warns of energy market "collapse" without Russian supply
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