WTI continues its winning streak amid heightened concerns over supply, climbs to $80.90
- WTI price appreciation following Ukrainian attacks on Russian refineries.
- Ukraine has declared not to extend a five-year agreement with Russia's Gazprom.
- Israeli Prime Minister Benjamin Netanyahu has affirmed to proceed with plans to expand into Gaza's Rafah enclave.
West Texas Intermediate (WTI) oil price continues its upward trajectory, reaching around $80.90 per barrel during the Asian trading hours on Monday. Crude oil prices receive positive momentum driven by concerns over supply disruptions stemming from heightened geopolitical risks.
Specifically, worries over potential supply interruptions have been fueled by Ukrainian attacks on Russian refineries. One such attack on Saturday resulted in a brief fire at the Slavyansk refinery in Krasnodar. According to a Reuters analysis, these attacks have led to the idling of approximately 7% of Russian refining capacity in the first quarter.
Furthermore, Ukraine announced on Sunday that it does not intend to extend a five-year agreement with Russia's Gazprom concerning the transit of Russian gas to Europe, nor does it plan to negotiate a new agreement. The existing deal, was established in 2019 between Moscow and Kyiv. This agreement is set to expire at the end of December 2024.
Israeli Prime Minister Benjamin Netanyahu also stated his intention to move forward with plans to expand into Gaza's Rafah, further complicating prospects for a peace agreement. German Chancellor Olaf Scholz remarked that this move would significantly hinder regional peace efforts.
Additionally, investors are eagerly anticipating interest rate decisions from major central banks this week. The Federal Reserve (Fed) is anticipated to maintain its current elevated policy rates. According to the CME FedWatch Tool, the probability of a rate cut in June and July stands at 56.3% and 75.2%, respectively. The resultant higher borrowing costs are dampening oil demand, consequently exerting downward pressure on Crude oil prices.