After breaking through important technical support levels the previous session, oil prices increased by about $1 per barrel on Thursday as investor attention was drawn to the possibility of a future fuel supply shortage due to a standoff over energy between European countries and Russia.
The price of Brent oil futures increased by 91 cents, or 1%, to $88.91 per barrel by 0331 GMT after closing the previous session at its lowest level since early February. At $82.89 per barrel, U.S. oil futures were up 95 cents, or 1.2%.
Only a few hours later, the European Union proposed restricting Russian gas prices, increasing the possibility of rationing in some of the richest nations this winter if Moscow follows through on its threat. A significant portion of the supply to Europe has already been shut off by Russia’s Gazprom (GAZP.MM), which has already suspended flows from the Nord Stream 1 pipeline.
The energy conflict between Russia and the West is one of the external factors influencing the oil price trend, according to analysts at Haitong Futures in a note.
They pointed out that a settlement or the reinstatement of an agreement between the West and Iran may have a substantial effect on Tehran’s nuclear programme. If a deal is reached, sanctions against Iranian oil exports would be lifted.
In other developments, the Telegraph newspaper earlier today stated that Britain’s new Prime Minister Liz Truss will repeal the nation’s ban on fracking on Thursday in response to skyrocketing energy prices and push for greater exploitation of the country’s North Sea reserves.
