Under the recent global financial environment, oil prices rose for the second consecutive day on Tuesday, reaching the highest point in months. This price increase is due to Ukraine intensifying its attacks on Russian oil infrastructure, with at least seven refineries being targeted by drone attacks this month. These attacks have caused approximately 7% of Russian refining capacity to be temporarily shut down, reducing production by 370,500 barrels per day.
As the market reacts to these events, the volatility of oil prices has drawn wide attention from investors and analysts. In the early hours of Wednesday (March 20th) in the Asian markets, the price of US crude oil fluctuated narrowly, with the April futures contract price around $83.12 per barrel, while the May futures contract was around $82.47 per barrel. The previous day, April futures contracts for US crude oil rose by $0.75, or 0.9%, to close at $83.47 per barrel, the highest level since October 27th of the previous year. Brent crude futures also rose, closing at $87.38 per barrel on Tuesday, an increase of 0.6%.
Analysts point out that recent intensification of attacks on Russian oil facilities by Ukraine, especially the damage to refining capacity, is expected to lead to a daily reduction in global oil supply of about 350,000 barrels. This supply tightening, combined with reduced crude oil exports from Saudi Arabia and Iraq, as well as signs of strong economic growth in China and the US, constitute complex factors driving international oil prices higher. This situation reflects the global oil market's sensitivity to changes in supply and demand, and also highlights the importance of geopolitical events on energy prices.
In this context, the growth in US residential construction and rising demand for oil, along with positive forecasts from institutions like UBS for the oil market, have further elevated market sentiment. Although the International Energy Agency (IEA) and other organizations anticipate that global oil supply shortages may ease due to increased production in the US and other non-OPEC countries, the market remains cautious about future supply conditions.
Additionally, investors need to pay attention to the upcoming US Energy Information Administration (EIA) crude oil inventory data and the Federal Reserve's interest rate decision, as these factors could impact oil prices. According to the latest data from the American Petroleum Institute (API), both US crude oil and gasoline inventories have decreased, further supporting oil prices.
Overall, despite many uncertainties facing the global oil market, the current supply and demand dynamics and geopolitical situation seem to be supporting the current upward trend in oil prices. In the coming weeks, market participants will continue to closely monitor any new information related to oil supply and demand, to assess the future direction of oil prices.
