Oil prices surged on Thursday amid signs that the supply of crude will remain tight despite US efforts to release more oil into the market.
Brent, the benchmark for two thirds of the world’s oil, was trading 0.04 per cent higher at $92.45 a barrel at 9:30pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was up 0.85 per cent at $86.28 a barrel.
US crude oil stocks fell unexpectedly by 1.7 million barrels last week, data from the US Energy Information Agency, which tracks weekly changes in the number of barrels of commercial crude oil held, showed.
On Wednesday, President Joe Biden announced plans to put 15 million barrels on the market, the final tranche of oil from a programme announced early this year to release 180 million barrels of crude from the country’s Strategic Petroleum Reserve.
Mr Biden plans to replenish stocks when US crude begins to trade at about $70 a barrel.
"With the recession fears already priced in, and with the US having played its ‘strategic oil reserve’ card, there is not much left to pull the price of a barrel below the $80 to $82 range," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
In a report on Wednesday, UBS said further releases from the SPR would not fix any structural imbalance caused by years of underinvestment and the world’s “ever-rising thirst for oil”.
The Swiss lender said oil markets would remain tight over the coming years due to chronic underinvestment in new projects and an increased focus on capital discipline in the US shale patch.
Brent crude rose by about $14 after the Opec+ alliance of oil-producing countries decided to slash its collective output by 2 million barrels per day, the biggest output reduction since the onset of the Covid-19 pandemic in 2020.
Oil prices have also been rising on a looming EU ban on Russian crude and oil products.
The EU’s deadline to stop importing Russian waterborne crude is on December 5, while a ban on refined products takes effect on February 5.
The announcement from the US administration was enough to push crude oil prices slightly lower this week but "bullish" momentum is building that the EU’s latest sanctions on Russian petroleum could exacerbate the market tightness, said Ehsan Khoman, head of emerging markets research at MUFG Bank.
Russia, which is currently embroiled in a conflict with Ukraine, will continue to export crude to some European countries after the ban.
However, it will still need to find a new market for more than 1 million bpd of crude by December, UBS said.
UAE currency: the story behind the money in your pockets
Paatal Lok season two
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Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
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Rating: 1/5
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
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Book: Seagull by Jonathan Livingston
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CONVICTED
Lionel Messi Found guilty in 2016 of of using companies in Belize, Britain, Switzerland and Uruguay to avoid paying €4.1m in taxes on income earned from image rights. Sentenced to 21 months in jail and fined more than €2m. But prison sentence has since been replaced by another fine of €252,000.
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Angel di Maria Argentina and Paris Saint-Germain star Angel di Maria was fined and given a 16-month prison sentence for tax fraud during his time at Real Madrid. But he is unlikely to go to prison as is normal in Spain for first offences for non-violent crimes carrying sentence of less than two years.
SUSPECTED
Cristiano Ronaldo Real Madrid's star striker, accused of evading €14.7m in taxes, appears in court on Monday. Portuguese star faces four charges of fraud through offshore companies.
Jose Mourinho Manchester United manager accused of evading €3.3m in tax in 2011 and 2012, during time in charge at Real Madrid. But Gestifute, which represents him, says he has already settled matter with Spanish tax authorities.
Samuel Eto'o In November 2016, Spanish prosecutors sought jail sentence of 10 years and fines totalling €18m for Cameroonian, accused of failing to pay €3.9m in taxes during time at Barcelona from 2004 to 2009.
Radamel Falcao Colombian striker Falcao suspected of failing to correctly declare €7.4m of income earned from image rights between 2012 and 2013 while at Atletico Madrid. He has since paid €8.2m to Spanish tax authorities, a sum that includes interest on the original amount.
Jorge Mendes Portuguese super-agent put under official investigation last month by Spanish court investigating alleged tax evasion by Falcao, a client of his. He defended himself, telling closed-door hearing he "never" advised players in tax matters.
