• WTI move sin on the $105 area as supply concerns persist in Asian markets. 
  • A pause in Vienna on talks to revive the Iran nuclear deal is impacting also. 

West Texas Intermediate (WTI) crude oil was higher on Monday and extended the gains on Tuesday in Asia. The persisting supply concerns as Russian energy sanctions are very much on the table following the Russian forces’ civilian killings in north Ukraine is keeping the bulls in play. 

A fresh high of $105.57 has been scored in Tokyo as a result with the WTI spot up by some 1.38%. White House’s National Security Advisor, Jake Sullivan, announced that the US is working with European allies to coordinate further sanctions on Russia. Sullivan said that they have concluded Russia has committed war crimes, Bucha offers further evidence to support that, pointing to a protracted war. ” Ukraine-Russia conflict may not be just a few more weeks, could be months.” 

Additionally, a pause in Vienna on talks to revive the Iran nuclear deal, which could put more Iranian barrels into the market is being priced in. Iran blamed the United States for halting the talks. The news helped oil futures higher on Tuesday with Brent crude futures up $1.58, or 1.5%, to $109.11 a barrel, while US West Texas Intermediate futures were up $1.61, or 1.6%, to $104.89 a barrel at 0028 GMT. The contracts rallied $2 a barrel in earlier trade after Japanese industry minister Koichi Hagiuda said the International Energy Agency (IEA) was still working out details for a planned second round of a coordinated oil releases.

Meanwhile, analysts at TD Securities addressed the Biden administration’s preparation to release up to 1 million barrels of oil a day from the US Strategic Petroleum Reserve. 

”Indeed, while the SPR release can quell near-term tightness concerns, it does not solve the longer-term issues in the crude market. Structural deficit conditions could still persist down the road as these reserves will need to be replenished at a time when global spare capacity and inventory levels will still be stretched,” the analysts explained.

”In this sense, the right tail in energy markets is set to remain structurally fat as depleted reserves would add to the existing risks of self-sanctioning, stretched spare capacity across OPEC+, constrained shale production, an uncertain Iran deal and OECD inventories at their lowest since the Arab Spring. We expect this vast array of supply risks to remain the driving force in the energy market.”

This article was originally published by Fxstreet.com.Read the original article here.

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