Oil prices reach highs by touching US $ 120 a barrel after reducing supply

The crude oil prices Benchmark Brent rose to around $120 a barrel on Thursday, amid a halt in Russian oil exports as traders try to avoid embroiled themselves in sanctions.

Support also came from U.S. crude inventories, which are at multi-year lows, which helped lift Brent futures to $119.84 a barrel, their highest level since 2012.

At 1024 GMT, Brent crude was up $2.18, or 1.9%, at $115.11 a barrel.

Brent has gained about 37% in the last 30 days and the contract’s six-month spread hit a record high of more than $21 a barrel on Thursday, indicating very tight supply.

US West Texas Intermediate crude hit a high of $116.57, its highest level since 2008, before retreating slightly to $113.12, up $2.52 or 2.3%.

The gains followed a new round of US sanctions against Russia’s oil refining sector, raising fears that Russian oil and gas exports may be the next target.

“We expect Russian oil exports to plummet by 1 million bpd from indirect impact of sanctions and voluntary actions by companies”, said Rystad Energy CEO Jarand Rystad. “Oil prices are likely to continue rising, potentially beyond $130 a barrel”.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, collectively known as OPEC+, decided to maintain a production increase of 400,000 bpd in March, despite the rise in prices, ignoring the requests of consumers. higher increments.

“While some remain obsessed with the idea that a deal with Iran will provide much-needed relief (from rising oil prices), we again caution that the deal is not yet done and that the sums involved would simply be too small to make up for a major Russian disruption”, Helima Croft, an analyst at RBC Capital, said in a note.

Meanwhile, US oil inventories continued to decline. Tanks at the Cushing crude hub in Oklahoma were at their lowest point since 2018, while America’s strategic reserves fell to their lowest level in nearly 20 years.

With information from Reuters