- Russian Sokol sheds 10.75pc for 2nd week: Arab Light jumps for 12th week
ISLAMABAD: Crude oil futures dipped up to 5.5 percent on a week-on-week (WoW) basis after surging over 26 percent in the preceding week, continuing their wild ride amid the Russia-Ukraine conflict.
Brent, the international benchmark for two-thirds of the world’s oil, edged lower by $5.44 (-4.61 percent) to $112.67 from $118.11 on WoW basis. In the preceding week, Brent jumped by $20.18 a barrel (+20.61 percent) to $118.11 from $97.93 on WoW basis. Brent traded as high as $139.13 a barrel this week, and as low as $105.60, which was the highest ever trading range for a week since the Brent benchmark was launched in 1988.
The West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $6.35 a barrel (-5.49 percent) to $109.33 from $115.68 on a weekly basis. In the preceding week, WTI jumped by $24.10 a barrel (+26.32 percent) to $115.68 from $91.58 on WoW basis. Both global benchmarks – Brent and WTI – have recorded an increase in 10 out of the last 12 weeks.
The price of Russian Sokol slipped by $10.61 (-10.75 percent) to $88.06 from $98.67 on WoW basis, going down for the second week in a row. Earlier in the preceding week, Sokol price slipped by 0.64 percent on WoW basis. Sokol price has been on a losing streak after surging for 10 straight weeks.
The price for Opec Basket slipped marginally from $117.96 to $117.23 on a week-on-week basis, showing a decrease of $0.73 (-0.62 percent). However, Arab Light remained the only benchmark whose price witnessed an increase of $1.21 (+1.13 percent) to reach $108.51 from $107.30 a barrel on a weekly basis. The prices for Opec Basket and Arab Light surged by 16.54 percent and 9.93 percent, respectively, in the preceding week. The price of Opec Basket has registered a minor dip after going up for 11 straight weeks, while Arab Light has been keeping its bullish bias intact for the last 12 weeks.
Prices violently whipsawed over the five-day period due to a flurry of news including a US ban of Russian crude imports and the UK’s gradual phase out of them. Much of the industry is already shunning Russian oil. In the most recent demonstration of its pariah status, there were no buyers in a tender for crude from the country’s Far East. Nuclear talks came to a standstill, prolonging the absence of Iranian barrels in a market desperate for additional supplies.
The fallout from the war has rippled through commodity markets from wheat to key fuels such as gasoline and diesel. Increasing inflationary pressure around the world are forcing banks to contemplate a phase of monetary tightening that might choke off the rebound.
However, Opec has stressed there’s no shortage, continuing its output hike of 400,000 barrels a day. The United Arab Emirates on Wednesday last called on Opec+ to boost output faster, though the nation’s energy minister appeared to later temper that message. The cartel, which counts Russia as a key member, has so far resisted calls from consumers to pump more, arguing that the surge in prices is driven by geopolitical tensions rather than a supply shortage.
