Brent futures market closed today - here's a recap of what drove prices this week

The ICE Brent Futures market is closed for trading today on account of Good Friday. Front-month ICE Brent closed at $85.12/bbl on Thursday, which is $0.41/bbl higher than the price at 09:00 GMT on Thursday.

PHOTO: Getty Images

Upward pressure:

The Brent futures contract ended the truncated week with nearly a 7% weekly gain amid growing supply concerns in major oil-producing nations.

In an unexpected move that sent oil markets aflutter this week, major OPEC+ producers led by Saudi Arabia and Russia pledged oil production cuts totalling 1.16 million b/d through 2023. These cuts will come in addition to the 2 million b/d output cuts announced by the group last October. This sudden and unexpected announcement by OPEC+ raised concerns about tightening oil supplies amid expectations that China's oil demand will grow this year.

Commodity experts like ANZ and ING estimated the oil supply shortage to exceed 2 million b/d this year due to OPEC+ output cuts coupled with a potential rise in global oil demand.

Prices were also supported by news that the Joe Biden-led administration in the USwould not be able to release more oil in the market to lower oil prices as the US emergency reserves are near their lowest level since 1983.

Kurdish and Iraqi officials announced this week that they have reached an initial agreement about resuming oil supply from Kurdistan-owned oil fields in northern Iraq. However, the agreement has not yet been finalised, keeping the oil supply halted.

Downward pressure:

In the meantime, growing concerns about a recession in the US and Europe slowed oil market gains mid-week.

Core inflation in Europe hit a record high at 5.7%, and OANDA’s senior market analyst Craig Erlam cautioned that this factor would drive European Central Bank’s policy measures to continue monetary tightening measures by raising its benchmark interest rate till May.

The US labour bureau’s official data showed that there were 9.9 million job openings in February, down from 10.5 million in January. The weak US data rekindled fears of a recession in the country.

The refinery strikes in France weighed on oil demand – especially from OPEC member Nigeria which is its biggest oil supplier. Kpler cargo tracking data, cited by Reuters, showed that France has imported 30,000 b/d of crude oil from Nigeria so far this month, which is less than half the 200,000 b/d it imported in January-February.

By Konica Bhatt

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