Adedapo Adesanya
By Adedapo Adesanya
After initial de-escalation of the Russia-Ukraine tension drove oil prices downwards, the commodity found its way up again as there was no evidence of a significant Russian withdrawal of its military forces from near Ukraine’s frontiers, despite claims that a pullback was underway.
Brent crude climbed $1.45 or 1.6 per cent to $94.81 per barrel while the United States West Texas Intermediate (WTI) crude gained $1.56 or 1.7 per cent to trade at $93.66 per barrel.
Both benchmarks hit their highest since September 2014 on Monday, with Brent touching $96.78 and WTI reaching $95.82.
On Tuesday, prices retreated when Russia announced a partial pullback of troops from Ukraine’s borders, indicating that tensions were easing.
However, on Wednesday, the Secretary-General of the North Atlantic Treaty Organisation (NATO), Mr Jens Stoltenberg, said that the alliance had not seen any de-escalation and that Russia was continuing its military build-up
Russia’s threatening posture toward Ukraine has dominated oil markets for several weeks, with concerns that supply disruptions from the major producer in a tight global market could push oil prices to $100 a barrel.
The market is also getting support as the Organisation of the Petroleum Exporting Countries (OPEC ) and its partners, OPEC+ struggle to pump as much crude as their quotas under the pact allow.
The gap between OPEC+ output and its target levels surged to as much as 900,000 barrels per day in January, according to estimates.
The current rotating president of OPEC, Mr Bruno Jean-Richard Itoua, who is also Congo’s oil minister said on Wednesday that there is no immediate solution to high oil prices.
The oil-producing countries’ capacity to increase crude supply is curtailed by a lack of investment in the industry.
The market received little or no pressure as the Energy Information Administration reported a crude oil inventory build of 1.1 million barrels for the week to February 11.
This compares with a draw of 4.8 million barrels estimated for the previous week and an estimated 1.076-million-barrel inventory decline for last week as reported by the American Petroleum Institute (API) on Tuesday.
