Crude oil prices accelerated again in February after rising double-digit percentages last January. The war that occurred between Russia and Ukraine made crude oil prices accelerate at the end of this month.
In trading Monday (28/2) at 13:50 WIB, Brent crude oil was traded at around US$ 102.62/barrel, up 4.8% compared to the close of trading on Friday last week. Brent returned to above $100/barrel for the first time since 2014 last Thursday.
At the same time, West Texas Intermediate (WTI) oil rose 5.7% to US$ 96.87/barrel.
Throughout February to today's levels, Brent has gained more than 12% and WTI is close to 10%.
The global economy has begun to recover after being hit by a pandemic caused by the corona virus (Covid-19) making crude oil prices continue to climb since last year. Both Brent and WTI throughout 2021 are up more than 50%. While in January 2022, both shot more than 17%.
People's mobility which is getting looser after mass vaccination in several countries is predicted to increase again, especially after the latest variant, Omicron, is known to not cause severe symptoms.
The International Energy Administration (IEA) estimates that world oil demand this year will increase by 3.2 million barrels per day, to 100.6 million barrels per day following the easing of social restrictions.
The problem is, the surge in demand is not keeping up with the sluggish increase in production. The pandemic has forced the closure or reduction of oil refinery production capacity, so it is not easy to reverse production to keep up with market demand.
Moreover, there is now a war between Russia and Ukraine which risks stagnating the supply of oil from the Red Bear Country. Russia is one of the largest crude oil producers in the world.
The United States (US) and Western countries do not impose sanctions on Russia's energy industry.
But Russia was excluded from the international banking information network known as SWIFT (Society for Worldwide Interbank Financial Telecommunication), which is a kind of social networking platform for banks.
Through SWIFT, the world's banks that are members of it can exchange information about the movement of money.
SWIFT has now connected more than 11 thousand financial institutions in more than 200 countries so that financial transactions between countries can be carried out.
If it is true that Russia is cut off from SWIFT, it could have an indirect impact on oil exports, so that global supply could be disrupted.
The sanctions imposed by Russian banks are making selling crude oil more difficult, said John Kilduff, of Again Capital, as reported by CNBC International. @juninhoo