Oil prices maintained their gains from last week and rose further in morning trading in Asia today as supply concerns persist.
Last week, the IEA report helped benchmarks rise 4%, with Brent crude above $85 a barrel and West Texas Intermediate above $81. The IEA said in a report that the oil market will be in the red this year, a sharp revision from its stance from last month when it said the market would be oversupplied.
Meanwhile, the IEA revised up its oil demand forecast, predicting oil demand growth of more than 1.3 million barrels per day this year, up from 1.2 million barrels per day in last month’s report.
Another source of supply concerns is a series of Ukrainian drone attacks on Russian refineries that have affected fuel production in the world’s largest exporter.
“The attacks on Russian refineries increased the risk premium on oil prices by $2 to $3 per barrel last week,” said Vandana Hari of Vanda Insights. “Risk premiums remain in place.” Said Bloomberg.
Reuters is Estimation The attack reportedly shut down 7% of Russia’s refining capacity in the first quarter of this year.
Meanwhile, prospects for peace between Israel and Hamas grew further remote after Israeli Prime Minister Benjamin Netanyahu said he would go ahead with a planned attack on Rafah despite recommendations to the contrary from Israel’s allies.
Moving forward, traders will be keeping an eye on the Fed’s two-day meeting starting tomorrow this week, but there are no real expectations of a rate cut, with most expecting the central bank to keep rates on hold.
Meanwhile, CERAWeek begins in Houston, with several CEOs from major oil companies speaking on the first day, including Total Energy’s Patrick Pouyanne, Aramco’s Amin Nasser, and Exxon’s Darren Woods. It’s planned.
Written by Irina Slav for Oilprice.com
