WTI crude oil futures surpassed the $107 per barrel level on Wednesday, extending the previous session's 8% gain as the IEA warned that global energy security is at risk after Russia's invasion of Ukraine. Today, OPEC+ countries may announce their decision to increase production.
IEA Executive Director Fatih Birol said on Tuesday that the current situation in energy markets is very serious and requires our full attention. It was also decided yesterday to release 60 million barrels of oil from emergency reserves. The move did little to tame soaring oil prices, which have reached new 7-year highs, as the deepening crisis in Ukraine and expanding sanctions against Russia have heightened fears of further supply disruptions.
Expectations: OPEC+ to maintain plan
OPEC+ will meet today to discuss production policy. OPEC+ is expected to stay with its plan to moderately increase supply despite the market turmoil caused by the Russian invasion of Ukraine.
The American Petroleum Institute reported that U.S. crude oil inventories fell by 6.058 million barrels in the week ended February 25, 2022, after falling by 5.983 million barrels in the previous week and compared to market expectations for an increase of 2.796 million barrels.
Inflation will sweep the world
In addition to oil prices, cereals, of which Russia and Ukraine are the world's major producers, also appear to be rising significantly. This, too, could put inflationary pressure on the world and could also result in stagflation.
The economic growth of the world economy may be threatened and the price level may become higher and higher. For it seems that the economic effects of war on the whole world are beginning. They will be a cost that almost everyone insists must be borne so that the world is not further terrorized by the President of the Russian Federation. This cost will be a further increase in inflation due to rising fuel and food prices.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.17% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
