Oil expands profits – Rising gas ‘brakes’

LAST UPDATE 18:58

Oil boosted profits on Wednesday, as just a day after the breakthrough that appeared yesterday in the two sides’ talks in Istanbul, today hopes for a diplomatic solution in Ukraine seem to be fading and worries about supply problems are returning.

The statement came from Kremlin spokesman Dmitry Peshkov, who said talks between the Russian and Ukrainian delegations on Tuesday had not yielded any “hopeful” or “progress”.

This position is reinforced by the ongoing bombardment by Russian troops on the outskirts of Kiev and parts of eastern Ukraine, despite Moscow’s commitment yesterday to drastically reduce its military operations in those areas once the targets were met and now focus on the Donbass areas.

Russia’s intentions to escalate the conflict have been challenged by both Ukrainian President Volodymyr Zelensky and Western officials, who have said they expect to see action, not words, while Pentagon spokesman John Kirby troops seem to be showing regression rather than retreat.

Reduced commissions are also supported by rising prices, as the American Petroleum Institute announced that crude stockpiles fell by 3 million barrels per week by March 25.

The drop was three times what analysts had expected.

Brent crude for next month traded at $ 113.74 a barrel, up $ 3.51, or 3.18%, after losing 2% yesterday.

West Texas Intermediate contract for the next month increased by $ 3.39 or 3.25% to $ 107.63 per barrel, after falling 1.6% on Tuesday.

“Fluctuating prices show an extremely sensitive climate among investors,” said Haitong Futures analysts. “People urgently need to see changes to make the market clearer.”

The market experienced a strong selloff in the previous meeting, after Russia promised to reduce military operations near Kiev, but the attacks continue, according to reports.

Commonwealth Bank analyst Tobin Gorey says the price recovery suggests that the oil market, at least, has a strong degree of skepticism about any “progress.”

Meanwhile, the United States and its allies are planning new sanctions on several sectors of the Russian economy that are critical to sustaining its invasion of Ukraine, including military supply chains.

Keeping the market “tight”, major oil producers are unlikely to increase production beyond the agreed 400,000 barrels per day when OPEC + meets on Thursday.

New jump for gas amid tensions for rubles

At the same time, gas prices have risen again as the West-Russia dispute escalates, following Moscow’s decision to require contract payments to be made in rubles, with the rise partly easing thereafter as The Kremlin has insisted that the transfer of payments in rubles will not be immediate but gradual.

In particular, the price of the contract in Amsterdam (TTF) increased by 7.41% and is moving at 117.50 euros per megawatt hour, having climbed earlier above 123 euros and while last week it had fallen in the area of ​​100 euros.

Germany warned today that it could lead to a gas emergency, a measure designed to counter a possible cut-off of gas supplies from Russia.

Economy Minister R. Habeck said supplies were secured for the time being, but stressed that “” Nevertheless, we need to increase precautionary measures to be prepared for an escalation on the part of Russia. ”

At the same time in Moscow, the speaker of the State Duma, lower house of the Russian parliament, Vyacheslav Volodin, today warned the EU that if it wants to import gas, it will have to pay in rubles.

It is recalled that yesterday, Tuesday, the G7 energy ministers rejected this request, while the President of France Emanuel Macron clarified to his Russian counterpart that such a thing would be impossible.