Oil prices jump, IEA calls for energy cuts

Oil prices jumped higher on Monday after Russian-Ukrainian talks appeared to yield no sign of progress, and markets continued to fear supply shortages – prompting a call from the International Energy Agency to reduce oil demand.

Crude oil futures rose more than 3% on Monday morning during Asian trading – benchmark Brent crude was at $111.46 and US futures at $108.25.

Oil prices have been volatile in recent weeks – rising to record highs in March before tumbling more than 20% last week to reach below $100. They jumped again in the latter half of last week to rise above this level.

In a note on Monday, Mizuho Bank said two factors are driving oil prices higher: continuing uncertainty between Russia and Ukraine, as well as hopes that China’s recent impact of the Covid virus could be. Less dangerous than expected Amid expectations of easing restrictions. Shenzhen main hub partially opened on FridayReuters reported that five districts were allowed to resume work and public transport to resume.

Ukrainian and Russian officials have met sporadically for peace talks, which have so far failed to make progress toward major concessions. However, Ukrainian President Volodymyr Zelensky called for another round of talks with Moscow.

“If these attempts fail, then this means that this is World War III,” Zelensky told CNN correspondent Fred Zakaria in an interview broadcast Sunday morning.

He witnessed the collapse of peace talks between Russia and Ukraine “Crude oil prices continue to rebound on Friday. However, they failed to recoup losses earlier in the week, with Brent crude closing more than 4%,” ANZ Research analysts Brian Martin and Daniel Hynes wrote in a note on Monday.

Meanwhile, supply shortages continued to worry markets, prompting a call from the International Energy Agency on Friday for “emergency measures” to reduce oil use.

The Russo-Ukrainian War has led to concerns about supply disruptions as a result of US sanctions on Russian oil and gas. The United Kingdom and the European Union have also said they will do so Phasing out of Russia’s fossil fuels. Russia provided 11% of global oil consumption and 17% of global gas consumption in 2021, and up to 40% of gas consumption in Western Europe in the same period, according to statistics from Goldman Sachs.

European Union governments are set to meet US President Joe Biden this week in his capacity as the European Union Considering an oil embargo on Russia Because of the unprovoked invasion of Ukraine.

The Commonwealth Bank of Australia warned on Monday that oil prices have fallen below the recent peak because markets are still pricing oil largely by “assessing the possibility of a diplomatic solution to the conflict in Ukraine”.

“The material shortages associated with the current sanctions on Russia, although it will eventually play a dominant role in determining oil prices,” Vivek Dar, director of energy commodities research at the bank, said in a note.

“The industry’s apparent inability to fill any potential gap has seen calls for lower consumption,” ANZ Research analysts said.

In its latest report, OPEC + showed that some producers are still falling short of supply quotas, as Reuters quoted sources who said the alliance missed its targets by more than one million barrels per day.

In a 10-point planThe International Energy Agency’s proposals to reduce oil demand included lowering speed limits for vehicles, working from home up to three days a week, and avoiding business air travel.

“We estimate that full implementation of these measures in advanced economies alone could reduce oil demand by 2.7 million barrels per day within the next four months, compared to current levels,” the IEA said on Friday.