[Crude Oil Today] WTI rose to the highest level since September 2008

Although the negotiation of the Iranian nuclear agreement is expected to reach an agreement, the conflict between Russia and Ukraine has escalated, the West has imposed sanctions on Russia, and the market is worried about the interruption of crude oil supply. After the Russian army occupied the largest nuclear power plant in Europe, worried about the interruption of oil and gas supply, the international oil price soared, and WTI rose to the highest level since 2008. On Friday (March 4), the settlement price of West Texas light oil futures in April 2022 on the New York Mercantile futures exchange was US $115.68 per barrel, the highest settlement price since September 2008, up US $8.01 or 7.4% over the previous trading day, with a trading range of US $107.25-116.02; The settlement price of Brent crude oil futures in May 2022 on the London Intercontinental Exchange was US $118.11 per barrel, the highest settlement price since February 2013, up US $7.65 or 6.9% from the previous trading day, with a trading range of US $109.62-118.98.

Since Russia took military action against Ukraine on February 24 and the United States and some western countries imposed sanctions on Russia, the crude oil futures prices in Europe and the United States have soared by more than 20%. In the past week, the first month futures of light and low sulfur crude oil on the New York Mercantile Exchange hit the highest weekly US dollar increase in history, with a net increase of US $24.09 a week, or 26.3%; The average settlement price per barrel was 106.62 US dollars, 14.404 US dollars higher than the previous week. The highest settlement price was 115.68 US dollars per barrel and the lowest was 95.72 US dollars per barrel; The trading range is US $94.43-116.57 per barrel. London Intercontinental Exchange Brent crude oil futures for the first month recorded the largest weekly increase since January 1991, with a net increase of US $20.18 or 20.61%; The average settlement price per barrel was 109.49 US dollars, 12.28 US dollars higher than the previous week, with the highest settlement price of 118.11 US dollars per barrel and the lowest of 100.99 US dollars per barrel; The trading range is US $98.30-119.84 per barrel. Moody’s, a rating agency, warned on Friday that the Russian Ukrainian war was increasing the risks to the global economy and exacerbating inflationary pressures through rising prices of key commodities, including oil. “The escalation of military conflict will put Europe’s economic recovery at risk. With inflation already high, the rest of the world will be affected by commodity price shocks, as well as the financial impact of sanctions against Russia and fluctuations in financial markets,” Kelvin Dalrymple, a senior credit officer at Moody’s, said in a report on Friday The relevant parties to the comprehensive agreement on the Iranian nuclear issue are “close” to reaching an agreement through negotiation. It is reported that the relevant ministerial meeting is about to be held. Iran is a member of OPEC that is not subject to production constraints. Once the export is liberalized, the oil market will increase by 1-2 million barrels of crude oil per day, which will offset the possible interruption of Russian crude oil.

In the spot market, traders wait and see. Due to the financial sanctions of the banking industry, Russian oil sales are difficult. It is difficult to clinch a deal even if it is far lower than the benchmark Brent crude oil price. On Thursday, standard & Poor’s group further lowered the spot evaluation price of Ural crude oil in the northwest European market by US $5.645 per barrel, US $27.87 lower than the spot evaluation price of Brent crude oil, the largest negative price difference in history. According to the analysis of standard & Poor’s global commodity watch, in other regions, due to the financial sanctions against Russia and the initiative of some traders and refiners to suspend the purchase of Russian oil, Russia’s crude oil supply to the global market may be reduced by 1 million to 2 million barrels a day this month. Saudi Arabia raised the official sales price of all kinds of crude oil in April, which also boosted the atmosphere of the oil futures market. Increased refining profits, tight crude oil supply and rising freight rates led traders to focus on the Middle East crude oil market.

Although crude oil futures rose to the highest level since 2008 after the escalation of the crisis in Ukraine, the number of online oil drilling in the United States still decreased. According to the data released by Baker Hughes, the oilfield service organization of General Electric Company, the number of oil wells drilled online in the United States was 519 in the week ended March 4, 3 less than the previous week; It was the first decline since January, an increase of 209 seats over the same period last year. The report shows that there is a reduction of one in the Ardmore Woodford basin; Arkoma Woodford basin is reduced by 1; Two more in Haynesville basin; One Permian Basin was added; There were 12 offshore platforms in the United States this week, the same as the previous week, down 2 from the same period last year. Baker Hughes data also showed that the number of natural gas wells drilled in the United States in the same period was 130, the highest since December 2019, an increase of 3 over the previous week; 38 more than the same period last year. Among them, there were 635 U.S. onshore oil and gas platforms, the same as the previous week, an increase of 246 over the same period last year. The total number of oil and gas drilling platforms in the United States was 650, the same as the previous week, an increase of 247 over the same period last year. Edward moyai, a senior analyst at OANDA, an investment platform, said, “although the oil price has been higher than $100 a barrel, the number of active oil well platforms in the United States has not increased rapidly, which means that we will see higher oil prices for the rest of this year.”

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