Energy Prices Rally After 20% Pullback
March 18, 2022
Energy prices rallied and closed significantly higher in yesterday’s trading. This was after the market pulled back more than 20% and entered into a bear market. The volatility and daily price moves continue to be big. The main driver of the rally yesterday was Russia denying peace talks with Ukraine had made progress.
The Federal Reserve raised interest rates by .25% as the market expected.
The International Energy Agency lowered their 2022 oil demand growth forecast. It also said OPEC+ is producing about 1.1 million fewer barrels than it targeted in March. OPEC+ compliance rose in the month of February to 136% from 129% in January. The IEA is also pushing consumers to cut back on oil use by ride-sharing, using public transportation, lower speed limits, working from home, and other measures.
Morgan Stanley said its new third-quarter Brent crude oil forecast is $120 per barrel, up from a previous estimate of $100 per barrel.
Russia’s Deputy Prime Minister, Alexander Novak, said energy supplies remain stable despite the tense political situation.