Oil in Asia extended gains after the biggest daily jump in 16 months, pushing prices above $100 a barrel as the Kremlin cast doubt on the progress of peace talks with Ukraine.
Futures in New York were trading near $105 a barrel on Thursday after jumping 8.4%. Crude surged after the Kremlin “wrong” reports of major progress in talks on Ukraine, but discussions will continue. oil price West Texas Intermediate is still poised for a second weekly loss after trading volatile above $9 in three sessions.
Markets have rallied on developments around the war and concerns about the Covid-19 lockdown in China, with a liquidity crunch adding to oil volatility and leaving prices vulnerable to large swings. Russian crude is still being treated with extreme caution by buyers, who are concerned about the damage to their reputation or the collapse of sanctions.
Russia’s invasion of Ukraine has fueled inflation, posing a challenge to central banks and governments as they seek to stimulate economic growth after the pandemic. The Federal Reserve raised interest rates this week and signaled further hikes to tackle the sharpest price gains in four decades.
“It seems to me that the market is just panicking and chasing its tail,” said Jeffrey Haley, a senior market analyst at Oanda Asia Pacific Pte. “We are going to get more intraday volatility. Oil is going to sit between $100-$120 a barrel, which is going to be a rough range during the next month.”
On the supply front, Libya said on Wednesday that OPEC should ramp up production to ease the energy crisis. Saudi Arabia’s Crown Prince Mohammed bin Salman told the Japanese prime minister a day later that the kingdom was keen to maintain the balance and stability of the oil market, state-run SPA reported.
Global benchmark Brent has jumped more than $5 a barrel in 16 consecutive sessions – the longest period of such volatility ever. The limit of liquidation is reflected in the open interest figures. Holdings for WTI fell to the lowest since 2016, while for Brent was the lowest since 2015.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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