Oil closes day higher, but falls in the week, with release of reserves by IEA

Oil closed higher this Friday (8), but accumulated losses throughout the week. Operators reassess the impacts of the war between Russia and Ukraine, in the face of news of the release of strategic reserves of the commodity by the International Energy Agency (IEA) and the United States. The lockdown in Shanghai was also on the radar.

WTI crude for May closed up 2.32% ($2.23) at $98.26 a barrel on the New York Mercantile Exchange (Nymex), while Brent for June rose 2.19% (US $2.20), at $102.78 a barrel, on the Intercontinental Exchange (ICE). The contracts accumulated losses of 1.01% and 1.54%, respectively, in the week.

Capital Economics points out that recent releases of oil reserves have added pressure on oil prices. Even so, the consultancy assesses that such market launches “are more of a tape than a solution”.

Even helping to offset lower exports by Russia, this is also a measure of last resort and points to widespread concern of cuts in supply, assesses the Capital.

In a report, the consultancy recalls that inventories are finite and that, at some point, oil production will have to rise if the Russian commodity is permanently banned by Western buyers.

At Oanda, analyst Edward Moya says prices have stabilised, but the growing number of active oil rigs is finding labor shortages, which will delay some increases in US oil production.

“The oil market is still tight, but if China’s lockdowns are not over in sight, oil prices could still weaken further, between 3% and 5%.”

In turn, Commerzbank points out that this week of losses for assets follows the week of biggest losses in two years in the oil market. With the release of reserves, there is a reflection on price trends: “oil prices are almost back to the pre-war level in Ukraine, about six weeks ago”.

The extension of the lockdown in Shanghai “without a doubt” also contributed to the decline in prices, assesses the German bank.