- In what is sure to be one of the wildest weeks ever in oil markets, Brent has traded in a record-breaking $33 range as uncertainty reigns.
- Oil prices soared past $130 at the start of the week after Secretary of State Antony Blinken suggested that the U.S. and its European allies were considering a Russian oil ban.
- Oil prices then crashed by $15 on Wednesday after the UAE, a key OPEC member, suggested it would support an increase in oil production from the cartel.
Oil prices have continued their wild ride this week, with Brent swinging up and down in a $33 a barrel range after ending the wildest week on record last week amid twists and turns in the international response to the Russian invasion of Ukraine.
Last week saw Brent Crude trading a massive $20 a barrel range, as the Russian invasion of Ukraine sparked concerns about supply amid an exodus of buyers of Russian commodities. That was the highest ever trading range for a week since the Brent benchmark was launched in 1988.
This week is on track to beat the volatility from last week after prices spiked to over $130 a barrel on Monday on comments from U.S. Secretary of State Antony Blinken that the U.S. was in “very active discussions” with allies about an import ban on Russian oil. Prices cooled to below $110 per barrel after German Chancellor Olaf Scholz said later on Monday that Germany was not favoring an import ban because “there is no other way to secure Europe’s supply of energy for heat generation, mobility, power supply, and industry.”
Oil prices then jumped again on Tuesday after U.S. President Biden announced a ban on imports of Russian energy without the participation of European allies.
On Wednesday, Brent oil crashed by 12%, or by $15 to $110 a barrel after the UAE, one of OPEC’s most influential members, signaled it favors production increases and “will be encouraging Opec to consider higher production levels.”
Early on Thursday, oil rebounded, with Brent Crude rallying more than 4% to $116 a barrel and WTI Crude up 3% at $112, after the UAE took a step back from assurances it would encourage fellow OPEC members to boost their production above their agreed quotas to help rein in runaway oil prices.
“Crude oil trades firmer after plunging 12% on Wednesday with Brent already having traded within a record $33 range so far this week,” Saxo Bank said in a note early on Thursday.