Saturday, 28 May, 2022

Oil prices edge up on Russia-Ukraine tension

Oil prices edge up on Russia-Ukraine tension

Popular News

TOKYO: Brent crude edged up on Wednesday as geopolitical tensions in Europe and the Middle East raised supply concerns while investors locked in profits ahead of updates from the US Federal Reserve and US oil inventory data.

Oil prices hit seven-year highs last week on worries that supplies could tighten due to Ukraine-Russia tensions, report agencies.

US President Joe Biden said on Tuesday he would consider personal sanctions on President Vladimir Putin if Russia invades Ukraine, while Western leaders stepped up military preparations and made plans to shield Europe from a potential energy supply shock.

Concerns about the Middle East also rose on Monday, when Yemen’s Iran-aligned Houthi movement launched a missile attack on a United Arab Emirates base hosting the U.S. military. The attack was thwarted by US-built Patriot interceptors, US and Emirati officials said. “The market downside is limited due to heightened tensions between Russia and Ukraine and the threat to infrastructure in the UAE,” Hiroyuki Kikukawa, general manager of research at Nissan Securities said, adding that oil was likely to continue its upward run after the Federal Reserve policy meeting.

Brent crude futures edged up 13 cents, or 0.2 per cent, at $88.33 a barrel at 0730 GMT, paring losses earlier in the session. The contract jumped 2.2 per cent in the previous session.

U.S. West Texas Intermediate (WTI) crude futures slipped 12 cents, or 0.1 per cent, to $85.48 a barrel, having climbed 2.8 per cent on Tuesday.

“Investors locked in profits just in case of a collapse in global share prices following the Fed’s update on its monetary policy,” said Tsuyoshi Ueno, senior economist at NLI Research Institute.

The Fed ends a two-day policy meeting later in the day, with market players anxiously awaiting further clues on the timing and pace of interest rate hikes, as well as how the central bank will go about slimming down its almost $9 trillion balance sheet.

Weekly U.S. inventory data released overnight by the American Petroleum Institute met expectations. Market sources said the data showed U.S. crude and distillate stocks fell while gasoline inventories rose for the week ended Jan. 21.