Oil extended rallying breaking above $110 a barrel, ahead of OPEC+ meeting and after the International Energy Agency warned that global energy security is under threat following Russia’s invasion of Ukraine.
U.S. WTI broke $110 per barrel which was the highest since 2013. The situation across energy markets is very serious, IEA Executive Director Fatih Birol said Tuesday after the U.S. and other economies agreed to release oil reserves.
Traders will closely observe a response from OPEC+ on Wednesday to decide on April’s supply of crude oil. However, a modest increase is widely expected.
Government worldwide are facing inflationary pressure after Russian went on full scale invasion in Ukraine which shot up oil prices further. The renewed supply constrain also prompted U.S. and its allies to release 60 million barrels of strategic oil reserves to tame prices.
“I can only see oil heading higher,” said Daniel Hynes, senior commodities strategist at Australia and New Zealand Banking Group Ltd, as reported by Bloomberg. “The market is waking up to the reality that we are already experiencing constraints on Russia oil without any formal sanctions. It’s hard to see what OPEC can do.”