Sequel to the global energy disruption resulting from the Russian-Ukraine war, volatility in oil markets has continued as prices swing from a 9% drop earlier in the week to a 5% jump overnight on Wednesday. Only for the oil market to edge down again early Thursday morning, Commerzbank said in a Thursday note.
Both Brent and West Texas Intermediate have shed up to about 2% again, with Brent trading at around $106 per barrel and WTI priced at $104, the bank said.
Although a sharp increase in US crude oil stocks was recorded, oil prices did not come under pressure due to a decline in oil product stocks. This comes after the US Energy Information Administration lowered its forecast for US oil production in 2022 and 2023, with output expected to average 11.9 million barrels per day in 2022 and 12.9 million b/d in 2023, Commerzbank noted.
The Russian Ukraine war which started on the 24th of February 2022 caused a global disruption in the supply of energy and oil products.
The EU imposed a series of sanctions on Russia following the invasion of Ukraine including the ban on the Russian Oil
Oil prices have had to soar to the highest prices during this period with the OPEC increasing production quotas for other oil-producing countries to meet the increasing demand for oil and oil products.
Some countries, which heavily depend on Russia for their oil, have had to source alternatives to meet their citizen’s demands.