Oil prices were rising more sharply on Monday as supply concerns returned to the forefront, although recession worries still loom.
Around 15:00 GMT (17:00 in Paris), the barrel of Brent North Sea for delivery in November took 1.84% to 94.54 dollars.
A barrel of U.S. West Texas Intermediate (WTI) for October delivery was up 1.80% to $88.35.
“Any lingering doubts about Russia’s willingness to use energy as a weapon to pressure its opponents faded last week,” commented Stephen Brennock, an analyst at PVM Energy.
Russian gas deliveries to Europe via the Nord Stream 1 pipeline are still suspended, fuelling fears of winter shortages. On Wednesday, Russia warned that it would no longer deliver oil or gas to countries that would cap the prices of hydrocarbons sold by Moscow, at a time when the West is working on such a measure.
“We see no reason to doubt (Vladimir) Putin on this point,” says Bjarne Schieldrop, an analyst at Seb.
“The market is poised for a tidal wave as Russian supply could fall sharply.”
The analyst points out that Russia is the world’s largest exporter of fossil fuels and that sanctions could thus lead to “serious supply losses”. “The explosion of natural gas prices around the world is a good example of what can happen to oil,” he continues.
Earlier last week, members of the Organization of the Petroleum Exporting Countries and their allies (Opec+) agreed to reduce their total production volume by 100,000 barrels per day.
A symbolic reduction, which “suggests that the producer group is willing to defend the high price environment,” Brennock says.
The price increase remains very limited, in a context of “aggressive monetary tightening by the main central banks and new confinements due to Covid in China, the largest importer,” said John Plassard, analyst at Mirabaud.
Recession fears are still looming, compounding the difficulties in oil demand.
In Germany, the gross domestic product (GDP) is expected to fall by 0.3% in 2023 under the blow of massive inflation, and the lack of Russian gas, against the backdrop of the war in Ukraine, according to a study by the IFO institute published Monday.
On Sunday, U.S. Treasury Secretary Janet Yellen also said that there was “a risk” of a recession in the United States because of the measures taken to slow inflation, which will necessarily weigh on economic activity, but that it is possible to escape.
