(MENAFN- ValueWalk) distelAPPArath / Pixabay
Brent oil is bound to see prices jump as volatility takes over markets. Brent, which fell moderately —0.4% to $104.19— after marking an intraday low of $102 and a high above $105, will soar amid the ongoing Russia-Ukraine conflict and lower production output.
Movements
Crude oil has fallen sharply in recent days after the U.S. announced Thursday the release of 1 million barrels per day from its strategic reserves over the next six months.
Buffett's
berkshire hathaway Deploys Nearly $80 Billion Of Cash In Two Years
Over the past couple of years, Warren Buffett has faced significant criticism for not finding anything to do with Berkshire Hathaway's growing cash pile. The conglomerate has accumulated a record amount of cash as the Oracle of Omaha has refused to complete any significant deals. The investor has complained that high equity market valuations have Read More
Get The Full Series in PDF
Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.
Q4 2021 hedge fund letters, conferences and more
Meanwhile, OPEC+ followed the script and announced an increase of 432,000 barrels per day, in line with forecasts. After this upsurge, it is estimated that production will reach 28.5 million barrels per day, although production levels are lower than those prior to the pandemic —30.4 million— but the demand in 2022 is expected to be higher than in late 2019.
In addition, the International Energy Agency estimates that, out of the 8 million per day that Russia exports, almost 3 million will stop being produced in the next month.
OPEC+ made no reference to the Russia -Ukraine war, and it only stated that the market is 'balanced' and that the recent volatility is due to geopolitical factors.
Stockpile Release
The organization said in a statement,“We have to face a scenario of high prices for a long time due to the tension arising from the Russia-Ukraine war.”
“Added to this is the shortage of supply, among other reasons due to international rejection of Russian oil —the second producer. But also due to the reduction of investments in the sector in recent years.”
“As the Biden administration is taking a very strong stance toward Moscow, promising more sanctions if Russia continues to wage war in Ukraine , we believe the stockpile release is being used as a tool to cushion the impact of these policy decisions abroad for the U.S.,” RBC analysts said.
This would reduce the necessary amount of price-induced demand destruction, the only oil rebalancing mechanism currently available in a world with no inventory reserves and no elasticity of supply, according to Goldman Sachs Group Inc (NYSE:GS).
Updated on Apr 1, 2022, 4:39 pm
MENAFN02042022005205011743ID1103952369
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.