The escalation of the conflict between Russia and Ukraine provoked another jump in the price of black gold. On Monday night, the price of the benchmark Brent brand exceeded $ 96 per barrel
On February 14, a new maximum was recorded in the oil market. North Sea Brent has reached its highest level in more than 7 years. The quotes soared above $ 96. The asset was last traded at this level in the fall of 2014. Compared to the previous closure, this grade of oil has risen in price by 1.7%.
The same percentage difference with Friday's trading was demonstrated by the Texas brand. The cost of WTI rose above $ 93 per barrel.
Analysts associate a new record in the black gold market with a difficult political situation. The day before, the White House said that the Kremlin could fabricate a pretext for an attack on Ukraine.
If the threat of invasion increases in the coming days, this will lead to a further increase in oil prices. Experts predict that in the pre-war situation, the price of Brent has a chance to break through the $ 100 mark.
If geopolitical risks decrease, the demand for black gold, on the contrary, will fall. According to analysts, even a small de-escalation of the Russian-Ukrainian conflict will cause a correction in the oil market. The cost of the North Sea brand risks falling to $ 70.
As for the current dynamics, on Monday morning, Brent dropped slightly below the record peak, which was taken a few hours earlier. So, at the time of preparation of the publication, the quotes were trading at $ 95.5.
Today, black gold is supported not only by the tense geopolitical background but also by difficult weather conditions in the United States, which negatively affect oil production capacities, and increase demand for the asset.
At the same time, the oil market is now experiencing slight pressure from the news on the next round of nuclear negotiations with Iran.
At the weekend, the world media reported that the participants in the Vienna negotiations on the restoration of the nuclear deal with Tehran had almost reached their goal.
If the issue of resuming the JCPOA (Joint Comprehensive Plan of Action) is resolved positively, the Islamic Republic will return to the global market.
Currently, it is known that Iran owns large reserves of black gold. This will allow to additionally put up for sale 2.5 million barrels of oil per day.
The market is worried that the implementation of such a scenario will collapse oil quotes. However, analysts do not see any reason for serious concern.
Yes, a correction cannot be avoided, but there will most likely not be a strong fall, since an additional 2.5 million barrels of oil is unlikely to compensate for the global appetite for black gold. According to forecasts of the International Energy Agency, this year the oil demand will increase to 100.6 million b/d.