Less oil on the market? New IEA estimates

Futures contracts for WTI oil today they fluctuate between potential gains and losses, hovering around $ 114 per barrel. During the previous session, we recorded a 5% increase in prices.

Increased volatility may also characterize the oil market in the following days and weeks. The main factor influencing the situation and prices seems to be Russia's attack on Ukraine. US President Joe Biden is to meet with NATO allies and announce additional sanctions against Russia.

US gas for Europe, but oil still from Russia?

As reported by the agency BloombergJake Sullivan, US national security advisor, said an agreement between the European Union and the US on natural gas supplies could be announced as early as Friday. In this way, the old continent could take another step towards independence from gas supplies from Russia, but a European embargo on oil from Russia seems unlikely today.

In the oil market, investors take into account not only the war in Ukraine, but also: progress in talks on a nuclear deal with Iran, the stoppage of the Caspian Pipeline Consortium terminal in Kazakhstan due to damage caused by the storm, the severe coronavirus epidemic in China, declining stocks US oil, as well as even earlier attacks by rebels on Saudi oil infrastructure.

According to the IEA, the prospect of disruptions in oil production in Russia may still be present. This, in turn, may pose a risk of a large-scale global supply shock. The IEA estimates in its March report that the production of 3 million barrels a day (mb / d) of Russian oil may be suspended from April as sanctions take effect and buyers avoid exporting.

IEA: crude oil demand lower by 1,3 million barrels per day 

OPEC + for the time being, it sticks to its agreement on a gradual but relatively small increase in supply in relation to the demand. Only Saudi Arabia and the United Arab Emirates have significant spare production capacity that could immediately help offset the Russian deficit.

As a result, the IEA agency lowered its forecast of global crude oil demand by 1,3 mb / d in the period from Q2022 2022 to Q950 2022. This means slower growth by an average of 99,7. barrels per day in 2022. Total demand is now projected at 2,1 mb / d in 2021, which translates into an increase of XNUMX mb / d compared to XNUMX, the report said.