The oil price also rose again this week. In particular, an increase in Ukrainian attacks on Russian infrastructure drove up oil prices. However, a correction took place later in the week due to a stronger dollar.
The oil price has taken another step upwards this week. On Thursday, March 14, the Brent benchmark stood at $80,74 per barrel. On Friday, March 15, the oil price was slightly lower, at $85,34. After that, the oil price rose quite sharply. On Thursday, March 19, the oil price reached its highest point of the week. A barrel of Brent oil cost $87,38 that day, only to drop by more than a dollar the next day. On Wednesday, March 20, oil traded at $85,18.
The pressure of Ukrainian attacks is increasingly felt on the oil market, analysts write. Ukraine has been carrying out attacks on Russia's oil infrastructure for several months to undermine Russian production. This week it was Rosneft's Ryazan refinery, which produces significant volumes. The refinery's maximum production capacity is 350.000 barrels per day and output is roughly 317.000 barrels per day. That is 5,8% of Russia's refining capacity. Two refining facilities, which together produce 254.000 barrels per day, are currently idle.
In addition, attacks on Wednesday, March 19, caused damage to the Novoshakhtinsk refinery, which produces approximately 96.000 barrels per day. For the time being, the refinery is running at full capacity, but this does not mean that production will remain constant during the work. Such a scenario also exists for the Norski refinery, where around 317.000 barrels per day are produced. In addition, attacks at four smaller refineries are causing problems.
In addition to the Russian offer, the Iraqi offer is also in danger of declining. So far, the country has not been able to reduce its production in line with OPEC guidelines. To comply with the oil cartel's guidelines, the country has chosen to reduce production by 3,3 million barrels per day.
US market puts oil under pressure
The American market also initially provided a tailwind. The American petroleum institute API notes that oil reserves have fallen by 1,52 million barrels. That is extra special, since reserves shrank by 5,52 million barrels last week. Given the sharp decline, the market had expected reserves to increase slightly. The fact that there was a significant decline shows that demand is greater than the sector estimates.
Later in the week, pressure arose due to developments in the American market. The fact that oil prices have turned around is mainly due to factors in the American market. A stronger dollar in particular puts pressure on oil prices. Because oil is traded in dollars, a higher dollar price makes oil more expensive in other currencies. As a result, the demand for oil falls, which has an impact on market prices.
The diesel price also rose sharply this week. On Thursday, March 14, the price of 100 liters of diesel was €131,59. On Tuesday, March 19, the price rose to €134,03. The decline in the oil market is still reflected to a limited extent in a lower price of diesel. On Wednesday, March 20, the price decreased by €133,60.