September 24, 2023

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Bent Crude Firms Up to US$102 Per Barrel


CEM REPORT | Oil prices reaffirmed its rally Monday after slumping back last week from the initial brief touch at above US$100 per barrel. The push back of prices was attributed to exception of Russian energy from sanctions.

However, it was a signal that oil prices could be brazing up for firm-up to the much anticipated US$100 per barrel. Now fuelled by the continued feud between Russia and Ukraine which is causing disruption in the oil market, it is becoming certain that price rally will remain for a good while as the conflict rages on.

Many industry watchers have continued to maintain that higher crude oil price is inevitable holding on the underinvestment in the industry which causes supply of many of the OPEC member countries to fall below quota. In agreement with them, if Russian invasion of Ukraine did not result in sustained price rally, under production will.

Brent was selling at US$102.16 Monday after gaining 4.32% to rise from the around US$96 it finally closed the week with. WTI Crude (March Contract) was selling US$96.49 gaining 5.27% at the beginning of the week.

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As more sanctions are being rolled out against Russia, what is not certain is whether Russia’s insistence on hostilities against Ukraine will finally force world leaders to include Russian energy sector in the sanctioned sectors.

Outcome of today’s talk between Russia and Ukraine will have a lot more impact on the price movement either upward or downward. What is not certain is the intensity of impact considering other factors instigating the rise in prices.

The talks between Ukraine and Russia is ongoing in Belarus after Ukraine finally agreed to send a delegation to meet Russian representatives as Moscow’s offensive against Ukraine went into its fifth day.

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