Oil prices continue to rise, Brent rose to $111.3 per barrel

21:04 06.05.2022 8899

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 Oil prices continue to rise on Friday on continued fears that the market will face a shortage of supply.

 According to Interfax, the OPEC+ countries voted yesterday to maintain the plan to increase the quota for oil production in June by 432,000 barrels per day.  However, despite the systematic increase in quotas since August 2021, the OPEC+ countries cannot reach the permitted level of oil production.  According to the results of March, they lag behind in production by 1.45 million bpd.

 The cost of July futures for Brent oil on the London ICE Futures exchange by 8:15 Moscow time on Friday was $111.3 per barrel, which is $0.4 (0.36%) higher than the closing price of the previous session.  As a result of trading on Thursday, these contracts rose by $0.76 (0.7%) to $110.9 per barrel.

 The price of futures for WTI oil for June in electronic trading on the New York Mercantile Exchange (NYMEX) by this time amounted to $108.6 per barrel, which is $0.34 (0.31%) higher than the final value of the previous session.  The day before, the cost of these contracts increased by $0.45 (0.4%) to $108.26 per barrel.

 European countries, meanwhile, are preparing to limit oil imports from Russia.  Earlier this week, the European Commission proposed an embargo on Russian oil supplies to EU countries as part of the forthcoming sixth round of sanctions.

 “The market has not yet fully factored into current prices a probable embargo on oil supplies from the Russian Federation, a vote on this package in the EU is yet to be,” notes City Index analyst Fiona Chincotta, quoted by Bloomberg. “This factor will deter any attempts to reduce prices for oil”.

 Meanwhile, the US authorities announced their intention to start buying oil on the market to replenish the strategic reserve.  As expected, the US Department of Energy will start accepting applications from oil sellers this fall, although real deliveries will begin later.

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