(BFM Bourse) – Galvanized by geopolitical tensions in Ukraine, threatening a supply that is already struggling to reach its pre-crisis levels, the price of a barrel of Brent stood at 90 dollars for the first time since October 2014.
Worried about the structural imbalance in the oil market for many months, investors take a dim view of the development of the situation in Ukraine. If Vladimir Putin tried to calm things down on Tuesday, ruling out the possibility of an armed conflict, Washington for its part does not rule out a Russian attack in the next three weeks. The White House has also urged American nationals living in Ukraine to leave the country as soon as possible. Faced with the fears caused by this escalation of tensions between Moscow and Kiev, oil prices are rising sharply again on Wednesday, operators fearing that the current crisis threatens oil supply – Russia being one of the world’s leading producers. .
Shortly before 5 p.m., the barrel of Brent thus gained more than 2% to briefly reach the threshold of 90 dollars, above which it has not moved since October 2014. The barrel of WTI climbed 2.4% of its side at 87.4 dollars, a level also unseen for more than seven years.
The escalation of the situation in Ukraine “with the continuation of the impasse between Russia and NATO members” is largely responsible for the surge in prices on Wednesday, observes Susannah Streeter, analyst at Hargreaves Lansdown. While Russia is stepping up military maneuvers on the Ukrainian border, leaving the threat of an invasion hanging over, Russian, Ukrainian, German and French representatives are meeting this Wednesday in “Normandy format” in Paris, a first for more six months.
“After a brief dip last week, crude prices are back towards the $90 threshold and, at this point, it looks like we won’t have to wait very long,” analyst Craig Erlam rightly predicted. ‘Oanda in its market point this Wednesday at midday. “Supply and demand dynamics remain favorable and the possibility of a conflict in Ukraine can only support prices as additional risk premiums are now ‘priced'”, he continues. Before concluding: “It is still unlikely that oil and gas will be used as a weapon in the near future, but if it were, it could lead to a sharp rise in prices, given the tension that reigns on the markets” warns the expert.
Counter-intuitively, the rise of the day has increased after the publication of a sharp increase in crude inventories in the United States over the past week. According to figures released Wednesday by the US Energy Information Agency (EIA), 2.4 million barrels came to inflate these stocks last week, when the market was betting on a much more moderate increase, from around a million barrels. This rise more pronounced than expected, the second consecutive after seven weeks of decline, is a bad signal for the American demand for black gold.
Quentin Soubranne – ©2022 BFM Bourse