The oil rally is expanding

Oil prices are moving higher for the fourth day in a row, further expanding profits after yesterday’s jump, as fears for supplies from Russia outweigh the effects of the lockdown in China.

In particular, after the jump of 2.16% yesterday, the June contract of Brent is strengthened today by 1.9% and moves to 109.68 dollars per barrel, having added another 2.09 dollars to its price.

Similarly, the US WTI after yesterday’s 3.3% rally, today sees its own June contract to rise again by 1.3% with its price at $ 106.75, having added another $ 1.4.

The new escalation of pressure began yesterday afternoon, following a Wall Street Journal report that Berlin’s representatives in European institutions said the country was no longer opposed to the embargo, as long as it was given time to secure supplies from other producers. .

The post follows statements by the country’s vice chancellor and economy minister, Robert Habeck, that Europe’s largest economy hopes to have cut off all crude imports from Russia within days.

It is characteristic that the upward trend of prices continues today, despite the fact that the second largest economy in the world, China, has not shown any intention to lift the severe restrictive measures that it has imposed for the outbreak of the pandemic, which are expected to hit economic activity and therefore crude demand.

“As lockdowns rise from March onwards, China’s economic indicators have plunged further into the red. We now expect China’s GDP to slow even further in the second quarter,” said a note from Wood Mackenzie chief economist Yanting Zhou.

According to him, “the volatility of the oil market will continue, against the background of the possibility of more and more extensive lockdowns in May and beyond, which will push down the short-term risks to oil demand in China, but also prices.”

However, concerns about demand levels appear to be offset by OPEC + ‘s intention not to increase production at its forthcoming May 5 meeting, sources told Reuters.

After all, according to Reuters, citing a document of the Ministry of Economy of Russia, the country’s oil production may decline by up to 17% in 2022.

At the same time, Barclays analysis estimates that a possible embargo on Russian energy products will push prices to higher levels, triggering a mild recession.

According to the British bank, due to the great dependence of EU countries on Russian oil and gas products, any restrictions on flows would put further pressure on energy prices and could even lead to the implementation of an energy card.

The prices of natural gas are essentially unchanged

According to Barclays, a possible interruption of gas supplies could cause a bigger blow to the growth of the eurozone, leading to a contraction of up to 5%.

For now, however, and with the uncertainty surrounding the special conversion accounts that Moscow now requires from European buyers, prices are currently fluctuating marginally.

Specifically, the TTF price of the June contract in Amsterdam is set at 99,345 euros the megawatt hour with short 0.5% dropwhile at the low of the day it had fallen to 96 euros.

“The market seems relieved that Russia has not extended the flow cut to other countries (after Poland and Bulgaria),” he said, adding that prices were also lower as demand was low at this time of year. Energi Danmark A / S.

The end of the winter heating season has reduced consumption on the continent and Maxar predicts that temperatures in western Europe will return to normal levels next week.

The record cargo of liquefied natural gas (LNG) arriving in Europe also keeps prices under control.