Oil prices continued to climb to multi-month highs on Tuesday as concerns over tightening supplies pushed the prices up once again. Recent attacks by Ukraine on Russian refineries have raised worries about potential impacts on global petroleum supplies, with an estimated decrease of around 350,000 barrels per day.
Energy analyst Alex Hodes from StoneX mentioned in a Reuters article that this situation could potentially raise U.S. crude prices by $3 per barrel. J.P. Morgan analysts pointed out that 900,000 barrels of Russian refinery capacity are currently offline, posing a risk premium of $4 per barrel to oil prices. Furthermore, OPEC's supply curbs have contributed to supporting prices, with Iraq confirming its commitment to output cuts.
Positive signs of increased demand and economic growth in China, where factory output and investment exceeded expectations, have also bolstered crude prices. Market analysts are expecting U.S.data to show a second consecutive weekly draw in domestic crude stocks, along with a draw on gasoline supplies, as reported in a survey by The Wall Street Journal.
The front-month Nymex crude for April delivery closed at $83.47 per barrel, while front-month May Brent crude finished at $87.38 per barrel, marking their highest settlement values since October. The energy sector showed strong performance, with Nymex RBOB gasoline futures experiencing their seventh consecutive daily gain. Various ETFs in the energy sector also displayed positive movements, and companies like Marathon Petroleum, ONEOK, Diamondback Energy, and Valero Energy reached intraday record highs. However, Citigroup analysts have forecasted a decrease in crude prices, with Brent crude expected to fall to an average of $78 per barrel in the second quarter and further declining to $55 per barrel by late next year.
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