London, September 8 (BNA): Oil prices rose nearly $1 a barrel on Thursday after falling through key technical support levels in the previous session, as the energy crisis between European countries and Russia focused investors’ minds on the extent of tight fuel supplies.
Brent crude futures rose 91 cents, or 1%, to $88.91 a barrel by 0331 GMT, after closing at their lowest since early February in the previous session. US crude futures rose 95 cents, or 1.2%, to $82.89 a barrel, Reuters reports.
Prices received a boost from Russian President Vladimir Putin’s threat to halt the country’s oil and gas exports if European buyers impose price ceilings.
The European Union has proposed capping Russian gas prices after just hours, raising the risk of rationing in some of the world’s richest countries this winter if Moscow carries out its threat. Russia’s Gazprom has already halted flows from the Nord Stream 1 pipeline, cutting off a large percentage of supplies to Europe.
Analysts from Haitong Futures said in a note that the trend of oil prices is being shaped by “various external forces such as the energy battle between Western countries and Russia.”
They noted that the potential impact of any agreement or reinstatement of an agreement between the West and Iran on Tehran’s nuclear program would also be significant. The agreement will see the lifting of sanctions on Iranian oil exports.
Elsewhere, in response to rising energy prices, Britain’s new Prime Minister Liz Truss on Thursday will scrap the country’s fracking ban and seek to make greater use of its reserves in the North Sea, the Telegraph reported earlier today.
Two sources familiar with government discussions told Reuters that the British government is expected to announce dozens of new licenses to explore for oil and gas in the North Sea in a bid to boost domestic production.
Meanwhile, a number of central banks around them are expected to start a new round of interest rate hikes to fight inflation.
The European Central Bank is expected to raise interest rates sharply when it meets later on Thursday. This is followed by the meeting of the US Federal Reserve on September 21.