By Adedapo Adesanya
Brent crude surged by 8.77 per cent or $8.6 on Thursday to $106.6 per barrel following warnings that the market could lose about 3 million barrels per day of Russian oil supply starting from next month.
In the same vein, the US West Texas Intermediate (WTI) grew by 8.21 per cent or $8.64 to trade at $103.3 per barrel as the International Energy Agency (IEA) said in its latest Oil Market Report that the world could run into the biggest supply crisis in decades.
Prices had fallen in the previous session after government data showed US crude inventories climbed 4.3 million barrels last week, versus analysts expectations of a fall of 1.4 million barrels.
With this latest development, the Brent crude oil price is likely to be driven back up again in the coming weeks as the war in Ukraine continues.
Market analysts noted that both supply and demand are hurting but supply is currently hurting more and a tight oil market for the coming two quarters is to be expected.
Prices also gained support as authorities pledged to support economic growth, giving the market hopes that, at present, the COVID-related lockdowns in two of its crucial cities would not affect the economy of the world’s largest crude oil importer.
Forecasts from Morgan Stanley also elevated the market as it raised its Brent price forecast by $20 for the third quarter to $120 a barrel, predicting a fall in the Russian production of about 1 million barrels per day from April.
Oil prices also shrugged off the US Federal Reserve rate hike, the first since 2018, and the expectation that a number of additional interest rate hikes are coming by the end of this year alone as inflation in the country is at its highest in 40 years.
Modupe Gbadeyanka