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Spectre of US$150/bbl looms as WTI jumps 26% in one week

Published by , Editorial Assistant
World Pipelines,

Enverus, the leading energy SaaS and data analytics company, has released an updated QuickPrice research report highlighting the possibility of US$150/bbl crude oil.

Increasingly severe sanctions imposed by the US and its allies on Russia in the wake of its invasion of Ukraine are isolating the country — one of the world's largest oil exporters — from global markets and pushing WTI to prices not seen since 2008. While sanctions have not directly targeted Russian energy exports, that sector is still being stretched to its limit and further tightening the global supply picture. If proposed bans on oil imports from Russia in the US and Europe come to fruition, US$150/bbl is not out of the question.

“Sanctions so far have not directly targeted Russia’s energy exports, but they have still been impacted. The country exports around 7 million bbl/d of oil and oil products, making it one of the largest exporters in the world. Last week, major oil and gas companies — including four supermajors — announced plans to exit their Russian businesses. Traders also reportedly had difficulty in finding buyers for Russia’s benchmark Urals crude despite significant discounts,” said Matthew Keillor of Enverus.

Key takeaways from Enverus’ QuickPrice research report:

  • WTI’s settlement of US$103.41/bbl on Tuesday was its first above US$100 since 2014. The Friday settlement of US$115.68/bbl was up 26% week-over-week and was the benchmark’s highest settlement since September 2008.
  • The US and some European allies are now considering a ban on Russian oil imports, which market watchers have predicted could lead to prices of US$150/bbl or more. For reference, the highest WTI settlement ever, set on 3 July 2008, was $145.29.
  • Henry Hub also climbed 12% last week to settle at US$5.016/million Btu on Friday, which was the benchmark’s first settlement over US$5 since 2 Feb. Although Russian gas supplies to Europe have continued, significant uncertainty helped drive a surge in European prices, and the conflict raised the prospect of increased demand for US LNG.

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