Oil prices surge as Putin mobilises more troops
21 Sep 2022
Brent Crude Oil is trading up 1.89% at 91.60
Oil jumped nearly 3% on Wednesday after Russian President Vladimir Putin announced a partial military mobilisation, escalating the war in Ukraine and raising concerns of tighter oil and gas supply.
Brent crude futures rose $2.26, or 2.5%, to $92.88 a barrel by 1051 GMT. U.S. West Texas Intermediate crude was at $86.09 a barrel, up $2.15, or 2.6%.
Putin said he had signed a decree on partial mobilisation beginning on Wednesday, saying he was defending Russian territories and that the West wanted to destroy the country.
Oil soared and touched a multi-year high in March after the Ukraine war broke out.
European Union sanctions banning seaborne imports of Russian crude will come into force on Dec. 5.
Signs of a recovery in Chinese demand, hit by COVID-19 shutdowns, also boosted prices.
At least three Chinese state oil refineries and a privately run mega refiner are considering increasing runs by up to 10% in October from September, eyeing stronger demand and a possible surge in fourth-quarter fuel exports, people with knowledge of the matter said.
Meanwhile, the United States said that it did not expect a breakthrough on reviving the 2015 Iran nuclear deal at this week’s U.N. General Assembly, reducing the prospects of a return of Iranian barrels to the international market.
The OPEC+ producer grouping – the Organization of the Petroleum Exporting Countries and associates including Russia – is now falling a record 3.58 million barrels per day short of its production targets, or about 3.5% of global demand. The shortfall highlights the underlying tightness of supply in the market.
Investors this week have been bracing for another aggressive interest rate hike from the U.S. Federal Reserve that they fear could lead to recession and plunging fuel demand.
On technical fronts Brent Crude Oil: RSI stood at 49.11 and currently it is trading below all MA. So, SELL position can be taken with following target and stoploss: