Informist, Monday, Mar 21, 2022
By Rahul Dhuri
MUMBAI – Crude oil prices soared today on geopolitical risk premium as Yemen-based Houthi rebels launched missile and drone attacks on Saudi Arabia’s oil and liquefied natural gas facilities on Sunday. While the attack did not cause much damage, it raised fears of supply outages.
Possibility of further sanctions on Russia also lifted prices.
* “The reason for the upswing is news that the European Union appears to be considering a ban on oil imports from Russia," Commerzbank AG said in a report. “A top-level meeting with US President Biden will be held this week, at which further sanctions against Russia are likely to be discussed.”
* At 1650 IST
--March crude oil contract on the Multi Commodity Exchange of India was up 4.7% at 8,336 rupees per barrel.
--April contract on the New York Mercantile Exchange was up 4.4% at $107.67 per bbl.
* Oil prices are expected to trade with a positive bias this week amid increased supply concerns and declining crude oil stockpiles. Investors fear that further sanctions may be imposed on Russia if it fails to come to an agreement with Ukraine, ICICI Securities said in a note.
* The OPEC and its allies compliance with oil production cuts rose to 136% in February from 129% in January, missing its target by over 1 million barrels per day, as an already tight oil market braces for major Russian disruption.
* West Texas Intermediate crude has risen 13.1% since Wednesday on fear of tight supply after the International Energy Agency said that sanctions against Russia could halt 3 mln barrels of oil supply from Moscow, starting April.
* Outlook for the evening session:
--MCX contract is seen at 7,700-8,530 rupees per bbl
--NYMEX contract is seen at $104.41-$109.47 per bbl
End
US$1 = 76.11 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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