Both Brent and American WTI have just crossed the symbolic $100 mark. An OPEC meeting, at which Russia will be present, is to be held on Wednesday. The price of gas is breaking a historic record.
Energy prices continue to soar against the backdrop of the war in Ukraine. Starting with oil: this Wednesday morning, the barrel of Brent – the price benchmark – exceeded 110 dollars for the first time since 2013. The price of a barrel of North Sea crude for delivery in May reached 110.87 overnight in Asia, up 5.6%, while US WTI soared 5.7% to $109.22, before also breaking above $110 this morning.
Investors fear a sharp decline in oil exports from Russia due to international sanctions. “Supply chain issues and inflationary pressures remain the number one concern for many investors around the world,” explains Andy McCormick, an analyst at T. Rowe Price, an American asset management firm.
Gas is not spared either since the European benchmark price for natural gas, the Dutch TTF, soared on Wednesday to 194.715 euros per megawatt hour (MWh), a historic high. The price of British gas reached 463.83 pence per therm (a unit of quantity of heat), very close to its all-time high reached last December, at 470.83 pence.
Russia is the second largest exporter of crude oil in the world and accounts for more than 40% of the European Union’s annual natural gas imports. The International Energy Agency, however, announced on Tuesday that its member countries would release 60 million barrels of oil from their emergency reserves to stabilize the market. In his first State of the Union address on Tuesday evening, US President Joe Biden announced that the United States would also release 30 million barrels of oil from strategic reserves to stabilize the market.
The conflict in Ukraine comes at a time when prices were already soaring due to insufficient supply and a strong recovery in demand around the world caused by the lifting of Covid restrictions in many countries. An OPEC meeting, during which Russia will be present, is to be held on Wednesday. The possibility of increasing production in order to temper the rise in prices will be discussed.
Updated at 11 a.m. with the surge in gas prices.