The sharp drop in oil prices leaves them at very high levels

The oil market reacted logically to the announcement of a partial withdrawal of Russian troops massed on the border with Ukraine: prices showed their biggest daily drop since the beginning of the year, with Brent 1st-nearby losing more than $3/b. One might think that there is still some downside potential if indeed the easing is confirmed, but one can also only note that the price of a barrel of Brent remains above $93 and is already rising again this morning. In a way, the limited drop in the geopolitical premium only highlights the difficulty that supply has in adjusting to short-term oil demand.

Regarding the negotiations with Iran, it seems that they are stumbling over the fact that Iran would like a commitment from the US not to renege on their commitments (especially in the perspective of a return of Trump to power), which obviously cannot be promised by the Biden administration. A positive outcome to the Iranian nuclear negotiations could therefore be delayed. 

In the US, the API expects a further decline in crude and product stocks. Inventories at Cushing are expected to fall by 2.4mb/d, putting them at their lowest level in four years.

EnergyScan oil news
Share this news :

You might also read :

February 12, 2021

Prices dropped again, in Europe and in Asia

European gas prices dropped again yesterday, still pressured by expectations of higher temperatures and stronger LNG supply to Europe in the coming days. The drop…
Join EnergyScan

Get more analysis and data with our Premium subscription

Ask for a free trial here

Don’t have an account yet?