Oil supply disruptions in Libya and Canada and Venezuela concerns are likely to boost oil prices in the short term, Chris Weafer, senior partner at Moscow’s Macro-Advisory consultancy, wrote in an emailed note to investors on April 12.
“The price of Brent was more volatile than usual in March due to the conflict between still poor fundamentals and the political statements from OPEC. Short-term, the price looks well supported with outages in Libya and Canada and Venezuela concerns,” Weafer wrote.
Libya’s largest oilfield, Sharara was reportedly again shut on April 9 after a group blocked a pipeline linking it to an oil terminal.
Also last week, a fire at Syncrude Canada Ltd’s plant restricted supplies of both light synthetic crude and heavy Alberta oil.
However, oil prices fell on April 12, pulling back after eight straight sessions of gains after US crude inventory data suggested the market was still heavily supplied, Reuters reported.
Brent crude futures settled down 37 cents to $55.86 a barrel after hitting a one-month high of $56.65. US West Texas Intermediate crude futures were down 29 cents and settled at $53.11 a barrel after touching the highest since March 7 at $53.76, according to the news agency.
Turning to Russia, Weafer noted that the ruble strengthened in March, ignoring the weakening oil price and statements from politicians. “The real interest rate is attracting billions of dollars every day in speculative investment playing the so-called carry-trade. We retain our year-end ruble-dollar forecast at 62.0 but expect more volatility,” Weafer wrote.
He said that the recent events in Syria raise concerns about US-Russia relations. “We should get a better sense of that during the US Secretary of State’s first visit to Moscow. At least the trip shows pragmatism not seen for several years,” Weafer wrote.