The prices of oil They ended sharply higher this Monday, driven by a paralysis of Norway’s main oil field and fears of a deepening war between Russia and Ukraine.
The price of a barrel of North Sea Brent for delivery in January rose 3.18% to $73.30.
Meanwhile, West Texas Intermediate (WTI) for December rose 3.19% to $69.16.
For Andy Lipow, of Lipow Oil Associates, “it is a combination” of factors that allowed crude oil to gain ground.
The market rose first on US President Joe Biden’s decision to authorize the use of long-range missiles provided by Washington for Ukrainian attacks on Russian territory.
It is a significant change for American diplomacy, since the Biden government had until now refused kyiv’s requests in this regard.
“The use of long-range missiles by kyiv to attack our territory would mean the direct involvement of the United States and its satellites in hostilities against Russia, and a radical change in the essence and nature of the conflict,” the Russian Ministry said. of Foreign Affairs in a statement.
“Russia’s response in such a case will be appropriate and will be felt,” he added.
This decision “is worrying because Russia had warned that this could lead to an extension of the conflict, which could be interpreted as possible attacks on targets linked to NATO in Europe,” Lipow explained.
He The market also felt the announcement of the closure of Norway’s largest oil field, Sverdrup, in the North Sea, after an incident at an electricity station.
The operator, the Norwegian public company Equinor, confirmed the stoppage to the newspaper Dagens Naeringsliv and indicated that its teams are working to restore the power supply for the offshore platform.
The site produces about 755,000 barrels of crude oil per day.
“We don’t know how long it will take to restore power” and that creates uncertainty about the supply, according to Andy Lipow.
Crude oil prices also benefited from a slight decline in the dollar, after two weeks of strengthening.
Since oil is traded in dollars, a weakening of the US currency makes the barrel cheaper for investors in other currencies.
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