- Oil prices are ahead on Monday amid heightened geopolitical tensions and OPEC supply concerns.
- WTI is heading back to $110, up some $16 from last week’s lows, and is targeting recent highs around $116.
oil prices They posted a strong rally on Monday as concerns about escalating fighting in the Russo-Ukrainian war and Libyan supply fueled bullish market moves. Prior month WTI futures last traded nearly $3.0 higher on the day at $108.50 with a break above $110 and a push towards recent highs in the $116 area expected. WTI has risen despite lower than usual market trading volumes due to the closure of many major European markets for the Easter holidays.
The US benchmark for light sweet crude oil is now trading over $16 a barrel above last week’s low of $92.50. Gains have been fueled more recently by pessimism on the Russo-Ukrainian front. Ukrainian President Volodymyr Zelenskyy’s rhetoric over the weekend suggests peace talks are on the brink of collapse based on developments in Mariupol, while updates from Ukrainian officials suggest a new Russian offensive in the east has begun.
The member nations of the IMF and the World Bank will meet this week and a major issue will be the tightening of sanctions against Russia given the insistence of the Western/NATO countries that dominate these global institutions. Sanctions on Russia’s economy seem likely to tighten, perhaps even on energy, and the impact on Russian production is already evident. Interfax reported last Friday that the country’s output has fallen 7.5% in April from the end of March.
OPEC+ supply struggles were also in the spotlight as the Libyan National Oil Corporation issued a warning of a “painful wave of closures” and declared a force majeure at its largest Al-Sharara oil field, as well like on other sites. The state corporation said an unnamed group “pressured the workers at Al-Sharara, forcing them to gradually shut down production and making it impossible for NOC to implement its contractual obligations.”
Technical levels
Source: Fx Street
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