Title: Oil Down, Set for Weekly Loss as Supply Concerns Continue
Mar 11, 2022 12:43AM ET
Oil prices slipped in Asia on Friday morning, posting their biggest weekly decline since November 20, 2021, but recovered some losses. Market volatility also continued on concerns about further sanctions on Russian oil versus efforts to increase supply by other major producers.
After dropping 1.6% in the previous session, Brent oil futures fell 0.73% to $108.53 by 12:39 AM ET. WTI futures fell 0.30 percent to $105.70, following a 2.5 percent drop on Thursday.
Brent futures were set for a weekly decline of about 7% after hitting a 14-year high of $139.13, while WTI futures were headed for a drop of about 8% after hitting a high of $130.50.
The black liquid has had a volatile week, with the US and UK seeking a ban on Russian oil supplies earlier in the week, then possible additional supplies from Iran, Venezuela, and the United Arab Emirates coming into play, and fighting intensifying in the Russian invasion of Ukraine.
However, the oil price softened after it became clear that the European Union, which is heavily dependent on Russian supplies, would not join the US and UK embargo.
ANZ Research analysts said in a report. Russia is the world's second-largest crude exporter after Saudi Arabia, and "the oil market is unprepared for such a supply shock as inventories are at multi-year lows."
In the short term, supply gaps are unlikely to be filled by additional output from members of the Organisation of Petroleum Exporting Countries and its Allies (OPEC+), as Russia is a member of the cartel, Commonwealth Bank analyst Vivek Dhar told Reuters.
Commonwealth Bank expects Brent futures to average $110 in the second and third quarters of 2022 but could rise to $150 in the short term.