Crude oil prices began the week with another rise, after last week saw a reversal of a two-week streak of gains on an abundance of glut predictions.
The upward pressure on prices was back, however, as European pressure on Russia increases, with reports over the weekend of Russian aircraft entering Estonian airspace and neutral airspace over the Baltic Sea, plus airstrikes on western Ukraine that were close to the border with Poland.
At the time of writing, Brent crude was trading at $67.15 a barrel, with West Texas Intermediate at $63.10 a barrel, both up from Friday’s close.
“Reports over the weekend that Russia was threatening over the Polish border has provided traders with a timely reminder of the ongoing risks to European energy security from the north east,” the chief executive of Australia and New Zealand investment platform Moomoo told Reuters.
Ukraine’s intensification of attacks on Russian refineries also contributed to the upward oil price trend, although Russian sources, notably pipeline operator Transneft, have denied claims of substantial damage to the country’s refining industry.
Tensions are running high in the Middle East as well, as four Western countries recognized a state of Palestine amid Israel’s intensified attacks on Gaza City. The recognitions prompted a strong response from Tel Aviv and Washington. France is convening a summit to discuss a two-state solution for Israel and Palestine, which the U.S. has said it would boycott and suggested it would hurt relations with the countries that recognized the Palestinian state, including warnings of punishment if any measures are taken against Israel.
Meanwhile, reports that crude oil exports from Iraq were on the rise served as a headwind for prices, reinforcing the perception that there is too much oil on the market and not enough demand to absorb it. On the other hand, China has continued to stockpile crude, absorbing some of the supply seen as excessive by many analysts.
By Irina Slav for Oilprice.com
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