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Brent crude rises above $120 a barrel as UK fuel prices hit record highs

May 31, 2022

Brent crude rises above $120 a barrel as UK fuel prices hit record highs

Price increases on global oil markets and at UK forecourts add to concerns about rising inflation and its impact

Car being refuelled
Diesel prices in the UK hit a record 182.7p a litre on Saturday, taking the cost of filling up a 55-litre diesel car above £100 for the first time. Photograph: salarko/Alamy

The global oil price has risen above $120 (£94.90) a barrel as record high petrol and diesel prices in the UK add to concerns about the inflationary pressure that families and businesses are facing.

Brent crude, the international benchmark, rose on Monday to $120 a barrel for the first time since late March, lifted by the easing of Covid-19 restrictions in Shanghai and Beijing, a move that could lead to higher demand for energy from China.

The possibility of a European ban on Russian oil imports also pushed up crude prices. European leaders have met to discuss next package of EU sanctions against Russia over its invasion of Ukraine.

Analysts said rising oil prices could stir further inflation fears as the world economy absorbed the impact of the war. A sustained rise may also fuel higher profits for energy firms, coming after the UK government announced a £5bn windfall tax on North Sea oil and gas producers to help fund financial support for households struggling with the cost of living.

Jeffrey Halley, a senior analyst at the financial trading firm OANDA, said: “Markets pricing in peak virus in Beijing and Shanghai are behind the rally in oil prices today, with a China reopening likely leading to increased oil consumption.

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Putin: $100 Oil Is “Quite Possible”

October 14, 2021

Putin: $100 Oil Is “Quite Possible”

  • It is “quite possible” that the WTI Crude oil prices reach $100 per barrel in light of growing global demand for energy commodities, Russian President Vladimir Putin said on Wednesday
  • Putin: Russia and its allies in the OPEC+ oil producer group want a stable oil market without any shock spikes in prices

It is “quite possible” that the WTI Crude oil prices reach $100 per barrel in light of growing global demand for energy commodities, Russian President Vladimir Putin said on a CNBC panel at the Russian Energy Week on Wednesday.

Asked by CNBC’s Hadley Gamble whether the U.S. benchmark could hit $100 a barrel, Putin replied “That is quite possible.”

However, Russia and its allies in the OPEC+ oil producer group want a stable oil market without any shock spikes in prices, Putin said.

“Russia and our partners and OPEC + group, I would say we are doing everything possible to make sure the oil market stabilizes,” Putin said, according to a translation.

“We are trying not to allow any shock peaks in prices. We certainly do not want to have that — it is not in our interests,” the Russian president added.

The OPEC+ group decided last week to stick to their planned 400,000 barrels per day (bpd) increase in collective production in November, despite calls from oil importing nations to add more supply and despite an expected additional demand from a gas-to-oil switch due to record high natural gas prices in Europe and Asia.

Oil prices could hit $100 in case of a colder winter, some analysts and investment banks have said in recent weeks. Record-high natural gas prices are forcing some utilities to switch to oil derivatives instead, boosting demand for crude.

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Crude oil prices will go the way of ‘whale oil’ as demand has peaked, says ARK’s Cathie Wood 

October 12, 2021

Crude oil prices will go the way of ‘whale oil’ as demand has peaked, says ARK’s Cathie Wood

Rising crude oil prices are a factor of supply rather than demand, she says

An old building of a British shipping base, which was consumed by a mudslide sparked by a volcano, crumbles at Whalers Bay in Deception Island, in the western Antarctica peninsula on March 06, 2016. In 1912 the Hektor Whaling Company was issued with a license to establish a shore-based whaling station. Approximately 150 people worked at the station during the austral summer, producing over 140,000 barrels of whale oil.

AFP VIA GETTY IMAGES

Much like the whale oil trade at its peak in the mid 1800s, crude oil prices have probably topped.

That’s according to Cathie Wood, founder and CEO of Ark Investment Management, who spoke of a coming peak in crude oil prices due to the arrival of electric vehicles (EV), in a series of tweets late Thursday.

Citing U.S. Energy Information Administration data, the investment manager said global oil demand peaked at 101 million barrels per day (mbd) in 2019, dropped to 92 mbd during the coronavirus in 2020, and has since rebounded to 97 mbd in 2021. “Based on our forecast for EV sales, @ARKInvest believes that oil demand has peaked,” Wood said.

ARK has predicted that EV sales will rise roughly 20-fold from around 2.2 million in 2020 to 40 million units in 2025, and industry heavyweight Tesla TSLA, 1.54% is the biggest holding in the flagship ARK Innovation exchange-traded fund ARKK, 1.04%. She also pointed to pension funds who are demanding oil companies reduce capital spending while Wall Street banks are denying them money for fracking, as OPEC is “holding the line on supply”.

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Crude oil, refined product prices jump after Colonial pipeline cyberattack

May 10, 2021

Crude oil, refined product prices jump after Colonial pipeline cyberattack

HIGHLIGHTS

Colonial pipeline primary artery for gasoline, refined products for South, East Coast

US declared a state of emergency following the attack

ICE Brent July contract up about 0.4% from previous settle

Singapore — 0346 GMT: Crude oil and refined product prices jumped during the mid-morning trade in Asia May 10, after a cybersecurity breach caused a disruption in operations of the US Colonial pipeline that supplies about 45% of all the gasoline and diesel fuel consumed on the East Coast.

At 11:46 am Singapore time (0346 GMT), the ICE Brent July contract was up 29 cents/b (0.42%) from the May 7 settle at $68.57/b, while the June NYMEX light sweet crude contract was up 19 cents/b (0.29%) at $64.90/b.

Meanwhile, for refined products, the NYMEX November RBOB contract was trading 2.81 cents/gal (1.32%) higher than the May 7 settle at $2.1550/gal and NYMEX November ULSD contract was up by 2.11 cents/gal (1.06%) at $2.0106/gal.

Margaret Yang, DailyFX strategist, told S&P Global Platts on May 10 that the rise in prices seen this morning were the result of the cyberattack on the Colonial Pipeline, which led to fears of fuel supply shortages in the country.

The Colonial pipeline is primary artery for gasoline and refined products for much of the South and East Coast. It delivers more than 100 million gal/d of fuel and heating oil to these regions.

According to media reports, even though operation on the smaller lines between terminals and delivery points had resumed, main lines remain offline, with no timeline given to the resumption of operations.

“We are in the process of restoring service to other laterals and will bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations,” The Colonial Pipeline Company said on May 9.

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What’s Behind The Crash In Crude?

December 19, 2018

What’s Behind The Crash In Crude?

Basra oil terminal

Oil prices crashed to new one-year lows on Tuesday, dragged down by a deepening sense of global economic gloom as well as fears of oversupply in the oil market itself.

The reasons for the sudden meltdown were multiple. Rising crude oil inventories and expected increases in shale production weighed on oil prices, but the price crash was accentuated by the broader selloff in financials.

Genscape said that inventories are rising, which has raised fears of tepid demand amid soaring supply growth. “The Cushing number came in higher than anticipated … it’s definitely pointing to the concern that there’s more supply and demand is weakening,” said Phil Flynn, analyst at Price Futures Group in Chicago, according to Reuters. “The market is still very nervous about that.”

Crude prices fell 4 percent on Monday and about 7 percent on Tuesday. WTI dropped below $47 per barrel and Brent fell to the $56 handle.

The EIA said in its latest Drilling Productivity Report that it expects U.S. shale production to top 8.1 million barrels per day (mb/d) in January, rising by a massive 134,000 bpd month-on-month. The Permian alone will see production rise by 73,000 bpd next month. By way of context, the gains in the Permian are bigger than even some of the large monthly declines that we have seen in Venezuela, for instance.

Still, with WTI dropping below $50 per barrel, shale drillers will start to face increasing financial strain. That could force a slowdown in the shale patch. “We’re probably going to see a supply slowdown in the U.S.,” Michael Loewen, a commodities strategist at Scotiabank, told Bloomberg. “I do think that producers will react.”

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