Analysis Energy
Oil remains stable despite new phase in war
The war between Russia and Ukraine enters a new phase with the firing of long-range missiles towards Russia and the country's response. Despite weak demand for oil, this underpins the oil price. After an initial rise, oil has been stable in recent days despite geopolitical uncertainty.
Crude Brent oil is currently trading higher than last week. On Friday, November 15th, Brent oil cost $71.04 per barrel. At the time of writing (Thursday morning, November 21st), it is $73.52 per barrel. There has been little movement in the price since Monday.
According to analysts, the market is holding its breath regarding a possible further escalation of the war between Russia and Ukraine now that the latter has been given the green light by the US to launch American Atacms long-range missiles at targets on Russian territory. Putin has previously made it clear that in that case, Russia would also be at war with NATO.
Reportedly, on Tuesday (November 19th), Atacms were actually fired towards Russia for the first time. Storm Shadow missiles were also deployed, for which the United Kingdom has given permission. In response, Russia also fired its first long-range missile. The war is thus entering a new phase, while Ukrainian President Zelensky hints at a diplomatic end to the war that has now lasted more than a thousand days.
Another temporary factor driving prices up was a power outage earlier this week that shut down production at the Norwegian Johan Sverdrup field. However, production at the largest oil field in Northwest Europe is already back on track, Reuters reported yesterday.
The weekly report from the US Energy Agency (EIA) released yesterday had a bearish effect on the oil price. US commercial oil inventories increased by 500,000 barrels in a week, more than expected. Analysts also note that Chinese oil imports are rising this month, attributed to the low price rather than an actual increase in demand for oil in China.
