High price increases on global fuel exchanges

Oil prices on the world's fuel exchanges are growing strongly in the course of Monday's trade – this is already the 3rd session with increases in commodity quotations. It will soon be a month when Russia attacked Ukraine and the end of the war cannot be seen. Additionally, the Huti attack oil facilities in Saudi Arabia, which is a key oil exporter, and the Chinese authorities are fighting another wave of Covid-19," the brokers say.

Oil barrel West Texas Intermediate in deliveries for April costs US$108.30 at NYMEX in New York, higher by 3.44%.

Brent oil on ICE in London in deliveries for May is valued at $111.50 per barrel, higher by 3.31%.

It will soon be a month when Russia has begun its war effort in Ukraine and for now it is not seen that this situation is to change rapidly.

Russian President Vladimir Putin is not ready to speak with his Ukrainian counterpart Volodymyr Zelenski – stated Chief Advisor and spokesman of Turkish President Recep Tayyip Erdogan Ibrahim Kalin.

"Zelenski is ready to meet, but Putin believes that his position for talks is not strong enough to take it," Kalin said.

"I believe that at some point this meeting will come to a peaceful compromise," he said.

Meanwhile, in unofficial talks, the United States urged its ally in NATO, Turkey to hand over the missile systems of Russian S-400 production to Ukraine, provided anonymous sources.

Turkey is the first NATO Member State to buy these missile air defense systems from Russia. Their deliveries to Turkey began in July 2019.

Russian President Vladimir Putin still claims that the "special military operation", which began on February 24, aims to disarm Ukraine and its denazification.

Meanwhile, the sentiment in the oil markets is also negatively affected by information from Saudi Arabia, where militants of Yemeni Huti group, allied with Iran, attacked at least 6 facilities in Saudi Arabia on Saturday and Sunday, including some facilities owned by Saudi Aramco.

The conflict in Yemen is largely seen as a substitute war between Saudi Arabia and Iran. Huti, who took power in Sanaa in late 2014, claim to be fighting a corrupt system and alien aggression.

Oil price spikes on global fuel exchanges prompt leading global importers of this raw material to exert stronger pressure on oil producers, including OPEC countries, to increase supply. On the weekend, among others, the Japanese authorities called on the United Arab Emirates to increase oil supply from the UAE.

Investors around the world are also following closely the efforts made by the Chinese authorities to control another wave of coronavirus epidemic in the country. Especially important for fuel markets can have consequences for Chinese operations and the introduction of lockdowns – for oil demand and its products.

"The volatility of oil market listings has, however, decreased slightly," says Stephen Innes, managing partner at SPI Asset Management Pte.

"Risks for oil supplies are not as bad as previously thought. However, the strategy of the Chinese authorities in the fight against Covid-19 is uncertain," he adds.

"The market is also observing what OPEC countries will do – whether they will increase production," he points out.

"Oil markets have quite a lot of problems to +digestion+", he stresses.

Source: PAP