U.S. oil reserves dwindle amid sanctions on Russian exports
Oil prices on the New York fuel exchange remain high due to concerns about threats to the global supply of this resource. Brokers report that U.S. oil reserves have experienced the longest series of declines since 2021.
A barrel of West Texas Intermediate oil for February delivery is priced at $80.09 (£63.40) on NYMEX in New York, up 0.06%.
Brent on ICE for March is priced at $82.06 (£64.93) a barrel, up 0.04% after a rise of up to 2.6% on Wednesday. Since the beginning of this year, this commodity has already gained 10%.
Among investors in the fuel markets, concerns are growing about threats to global oil supplies, and U.S. crude oil inventories have experienced the longest series of declines since 2021.
Sanctions against Russia
At the beginning of this week, oil prices rose significantly after the White House announced at the end of last week a set of sanctions against the largest Russian oil companies and the energy sector. This threatens the supply of Russian oil.
U.S. administration officials indicated that these are the toughest sanctions imposed so far and are expected to cause losses to Russia worth billions of USD per month.
The sanctions imposed on Russia, combined with a relatively resilient demand for fuels in China and other countries worldwide, are causing significant changes in oil prices, emphasises Anindya Banerjee, a strategist in the commodity and currency markets research department at Kotak Securities Ltd.
Low reserves
In addition, there are low oil reserves in the U.S., adds Anindya Banerjee.
In the past week, U.S. crude oil reserves fell by 1.96 million barrels, or 0.47%, to 412.68 million barrels, according to the U.S. Department of Energy (DoE) in its weekly report.
This marks the 8th consecutive week of declining reserves, reaching their lowest level since April 2022.
The Israel-Hamas agreement
Meanwhile, analysts point out that oil prices remain high despite the agreement between Israel and Hamas on a ceasefire.
On Wednesday, mediators reported that the Israeli government and the Palestinian terrorist organisation Hamas reached an agreement on a ceasefire in Qatar after 15 months of war in the Gaza Strip.
Representatives from the United States, Qatar, where the talks were held, and Hamas confirmed the agreement.
The agreement includes a six-week ceasefire and the gradual withdrawal of Israeli forces from the Gaza Strip.
Hamas and affiliated militants are to release 33 hostages taken during the organisation's attack on Israel on 7 October 2023: all women, children, and men over 50 years old. In return, Israel is to release several hundred Palestinian prisoners.
