Oil Prices Rise in First Quarter of 2024

Escalating tensions in the Middle East, traders’ fears of a possible supply cut, sanctions against Russian oil exports, and, finally, the production cuts decided by the Organization of the Petroleum Exporting Countries and their partners (OPEC+) – all these factors pushed up oil prices, which in the first quarter recorded an increase of 13% for Brent and 16% for West Texas Intermediate (WTI).

According to the international agency Oilprice, in the afternoon of March 29, the futures for Brent with delivery in May, a benchmark for two-thirds of the world’s oil, stood at $87 per barrel (+1.86% compared to the previous session), and for Texas WTI April contracts recorded growth of as much as 2.24%, rising to $83.17 per barrel.

According to a press release by analysts at Business Monitor International (BMI Research), a research center owned by the international rating agency Fitch, “risk premiums associated with the war between Russia and Ukraine have re-emerged following the intensification of Ukrainian missile strikes on oil refineries and many other energy infrastructures in southwestern Russia.” “Russia’s problems, combined with supply risks caused by ongoing events in the Middle East and OPEC+ cuts, have contributed to a significant price increase,” the experts write.

On April 3, OPEC+ countries will meet via videoconference to analyze the situation on the global oil market, followed by a ministerial meeting of the cartel in Vienna (Austria) in June. Meanwhile, the USA increased strategic stockpiles, which rose by 3.2 million barrels in the trading week ending March 22. The increase in inventories indicates lower demand in the market, which has been affected by the growing economic instability around the world.