Oil prices have risen due to increased demand in the market, triggered by the new sanctions imposed by the USA against oil supplies from Russia. Saudi Aramco, the world's largest oil exporter, announced a sharp increase in prices for oil supplies to Asia for March of this year. This decision, along with price hikes across all other regions, indicates that "the new sanctions against Russia are beginning to take effect, and Saudi Arabia can leverage a tighter market," said market analyst Tony Sycamore from IG.
The main prices for WTI oil in the USA increased by 18 cents, or 0.25%, reaching a level of $71.21 per barrel. On the market, the price for oil has risen, with Brent futures also climbing by 14 cents, or 0.19%, to $74.75 per barrel. This occurred after representatives of Saudi Aramco announced the price increase for upcoming supplies. The following day after the updates, demand for oil in Asia due to heightened interest from China and India stabilized prices for energy resources.
"After yesterday's price fluctuations and new prices from Saudi Arabia, there will likely be some decline in buying from traders closing positions ahead of strong support in the $70/68 range," noted analyst Tony Sycamore. A halt in price decline is also linked to the new US sanctions against Russia targeting refined vessels used to circumvent trade blockades.
However, despite the price increase for oil, weakened demand is also observed due to an increase in inventories of crude oil and gasoline in the USA, as well as connections with new tariffs introduced by the USA and China towards each other.
"Although some tariff measures might lead to a price increase for oil, the net effect will likely be gradual, considering their potential negative impact on the global economy and Trump’s readiness to present exemptions for energy suppliers (to mitigate impacts on supplies)," said analysts from BMI in a statement.
