Brent oil price remains at $63 per barrel

Prices for benchmark oil on Wednesday changed weakly and in different directions, Interfax reports.

The cost of April futures for Brent oil on the London ICE Futures stock exchange by 7:17 a.m. Kyiv time was $63.45 per barrel, which is $0.1 (0.16%) higher than the price at the close of the previous session. As a result of trading on February 16, these contracts renewed their 13-month high, having risen in price by $0.05 (0.1%) to $63.35 per barrel.

The price of WTI crude oil futures for March in electronic trading on the New York Mercantile Exchange (NYMEX) by that time amounted to $60.04 per barrel, which is $0.01 (0.02%) lower than at the close of the previous trading. On Tuesday, contracts rose by $0.58 (1%) to $60.05 per barrel, for the first time since January 2020 exceeding $60 per barrel.

The jump in prices was due to a winter storm in the United States, which left millions of people without electricity. As noted by S&P Global Platts, severe frosts in some US states, including Texas, continue to negatively affect shale oil production and refining.

However, given the temporary nature of the weather disruptions and reduced demand from refiners that offset the decline in production, reduced supplies are no longer helping to strengthen oil prices.

The oil market is already experiencing support thanks to forecasts of an improvement in demand amid the recession of the pandemic, expectations of new measures to help the American economy and a reduction in production by OPEC+ countries.

At the same time, analysts warn that as oil prices rise, the likelihood of a faster recovery in OPEC+ production is increasing, which will reduce the supply deficit that is supporting the market.

"There are speculations that the group could ease the production cut a little," analysts say ING, who notes that much will depend on how quickly Saudi Arabia pulls back from the voluntary additional production cuts.

“High oil prices increase the likelihood that US shale producers will increase activity. They can do this quickly enough and take away some of the market shares from OPEC+ producers. As a result, the potential for OPEC + cuts to change is rapidly increasing,” said Jeffrey Halley, senior market analyst at OANDA.

Tags: oil, USA, OPEC+, price, petroleum products, Saudi Arabia, decline in production, economy, COVID‑19 vaccine

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