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Oil rebounds as escalating Ukraine conflict raises supply concerns -Breaking

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© Reuters. FILE PHOTO – Models of oil barrels are shown in front of the Ukrainian and Russian flag colors. This illustration was taken on February 24, 2022. REUTERS/Dado Ruvic/Illustration


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Florence Tan

SINGAPORE, (Reuters) – Oil prices rose on Friday after the interruption of Russian oil exports due to western sanctions outweighed any prospect that Iran will receive more supplies as a result of a potential nuclear agreement.

The futures contract for May rose up to $114.23/barrel and stood at $113.72. This was an increase of $3.26 (or 3%) by 0121 GMT. On Thursday, the contract declined 2.2%.

U.S. West Texas Intermediate rose by $4.15 or 3.9% to $111.82 per barrel in April after reaching a record high of $112.84 earlier this session. This contract declined 2.6% during the previous session.

Oil prices rose as oil prices fell due to signs of an increase in Russia-Ukraine tensions. This was after news broke that the largest nuclear plant in Europe, Ukraine, had caught fire following an attack by Russian troops.

Fears that sanctions from the West on Russia for the Ukraine conflict may cause disruption to shipments of oil are driving prices up. Russia is the biggest global exporter and importer combined of crude oil. Russian sanctions have already slowed trade activity, as customers are reluctant to make purchases.

Vivek Dahar (OTC:), analyst with Commonwealth Bank of Australia, stated that “Price increases due to actual or perceived disruptions of Russian oil exports should more then offset any fall of prices from potentially greater Iranian crude oil supplies.”

The prices moved in the $10-$15 range Thursday. However, they settled down for the first time since four sessions. This was due to investors focusing on the Iran nuclear deal revival. It is anticipated that this will increase Iranian oil exports and reduce global tight supplies.

WTI will rise more than 22%, Brent rising 16% and Brent up nearly 22% after reaching their highest point in a decade.

Dhar, Commonwealth Bank’s economist, expects Brent will average $110 per barrel during the second and third quarters this year. However, prices could rise to levels that are higher than our expectations in the near term. He said that Brent futures could trade up to $150.

The talks on the renewal of 2015 Iran nuclear agreement seemed to be nearing a conclusion with talk of a ministerial meeting. A U.N report released on Thursday indicated that Iran has most of the required enriched uranium to make one bomb, if it is purified further.

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