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Oil Rally Pauses as Russian War Continues to Rattle Tight Market

Published 04/13/2022, 07:48 PM
Updated 04/13/2022, 08:09 PM
© Reuters.  Oil Rally Pauses as Russian War Continues to Rattle Tight Market

(Bloomberg) -- Oil steadied after a two-day surge as the fallout from Russia’s invasion of Ukraine continued to ripple through a tight global market.

West Texas Intermediate futures traded near $104 a barrel after rallying almost 11% over the previous two sessions. The International Energy Agency said in a report Thursday that OPEC+ members had only supplied 10% of their promised supply increases for March, squeezing an already tight market that’s grappling with reduced Russian flows. 

U.S. crude stockpiles jumped last week, in part due to moving strategic oil reserves to commercial inventories. The Biden Administration and its allies have agreed to tap emergency supplies to tame rising energy prices fanned by the invasion of Ukraine. President Vladimir Putin has vowed to continue the war, which is in its second month.

The oil market has seen a tumultuous period of trading since Russia invaded Ukraine in late February. The reserve release by the U.S. and its allies, along with a Covid-19 resurgence in China has weighed on prices in the last few weeks. There are some signs of easing virus restrictions and China’s central bank is expected to take measures to help bolster a faltering economy.

U.S. crude stockpiles surged by 9.4 million barrels last week, the most since March 2021, according to Energy Information Administration data released on Wednesday. Gasoline inventories dropped for a second week, while distillate supplies -- a category that includes diesel -- fell by 2.9 million barrels.

©2022 Bloomberg L.P.

Latest comments

wtf where s d gold update???? last update 23 hours ago.........useless
Maybe you should have stated why there was such a big inventory increase. The SPR moved almost 4 million barrels into the market. Which im sure will end up in Europe so they have ample supply. In case Russia turns off the taps. The market is extremly tight and only going to get tighter. Especially with OPEC+ unwilling to up their production Quotas. OPEC will make sure the US and EU will pay dearly for sanctioning Russia. Oil is hedaed to$200 a barrel even with this huge SPR releases. What happens when there isnt any oil left to release? Then oil may even see $200+ a barrel which will have significant effects on the economy. One good thing will be the push to electric and alternative energy vehicles.
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