Logistics problems related to oil exports from Russia create upward pressure on the market
WTI crude futures jumped over 8.0% to above $103 per barrel, highest level since 2014 as investors remain concerned about supply disruption from key exporter Russia after fights in Ukraine intensified. Russia exports about 5 million barrels a day of oil per day and this is the largest source of income for the Russian budget, more than gas or coal! Strong economic sanctions have been imposed on Russia and are already causing logistical difficulties. Market participants indicate that some traders have problems with paying for Russian oil, tankers refuse to deliver Russian oil, or some ports (including in the UK) block access to Russian ships. In addition, OPEC indicates that it is reducing the forecast of oversupply on the market and the implementation of the agreement on production limitation increases to 136% in February from 132%.
However, not all information is positive for the oil market. The United States and other allied countries are considering releasing 60-70 million barrels of oil from strategic reserves. Such information would send a signal to investors that the market will be stabilized. It is also worth noting that earlier speculations referred to 50-60 million barrels.
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OIL.WTI is trading at USD 103 per barrel. Today the price broke above the upper limit of the widening wedge formation. Source: xStation5
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