Oil continues to rise weekly on concerns over escalation of war in Ukraine

Oil prices continued to rise on Friday, 22 November, heading toward a weekly increase of over 4%, as the war in Ukraine intensified and Vladimir Putin warned of a global conflict.

Source: Reuters

Details: Brent crude futures rose by 10 cents, or 0.1%, to US$74.33 per barrel. Futures for US West Texas Intermediate oil increased by 13 cents, or 0.2%, to $70.23 per barrel.

Both contracts jumped 2% on Thursday, 21 November, and are set to reach a maximum of 4% for the week, which would be the strongest weekly gain since the end of September, as Moscow escalated its offensive in Ukraine after the US and the UK allowed Kyiv to strike Russia with its weapons.

Putin stated on Thursday that his troops had launched a ballistic missile at Ukraine. He also warned of a global conflict, raising the risk of disruptions in oil supplies from one of the world’s largest producers.

Russia stated this month that it was producing about 9 million barrels of oil per day, despite a decrease in production following the import ban related to its invasion of Ukraine and supply cuts by the OPEC+ group of producer countries.

Ukraine has used drones to strike Russian oil infrastructure, including in June, when it used long-range drones to hit four Russian oil refineries.

Background:

• Since 13 November, the Nizhegorodnefteorgsintez refinery, which is the fourth largest in Russia by oil refining capacity and the second largest in petrol production, has stopped production processes due to a breakdown.
• The volume of primary oil refining capacity that is idle at Russian refineries increased by 0.62 million tonnes (+34.4%) in November, compared to the previous plan, reaching 2.42 million tonnes.

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