Oil prices remained volatile on Friday amid the continuing disruption of supplies from Russia due to sanctions over the Ukraine conflict.
“Brent crude futures for May rose to as much as $114.23 a barrel and were at $113.72, up $3.26,” Reuters reported.
Prices briefly fell on Thursday as investors were encouraged by the prospects of a revival of a nuclear deal with Iran, which would boost oil exports from Tehran.
However, fears of continued oil price hikes remain. JPMorgan Chase & Co warned on Thursday that Brent crude could end the year at $185 a barrel if supplies from Russia continued to be disrupted.
J.P. Morgan analysts noted about 66 per cent of Russian oil was struggling to find buyers. “In the short term, the scale of the supply shock is so large that oil prices need to reach and stay at $120 a barrel for months to incentivize demand destruction, the analysts said, assuming there would be no immediate return of Iranian crude barrels,” Bloomberg reported.
Bloomberg noted “Without a return of Iranian barrels to the market, the bank expects oil prices to average $115 in the second quarter, $105 in the third quarter and $95 by the fourth quarter.”
Reuters reported that trading activity for Russian crude oil already appeared frozen as buyers were hesitant in the face of sanctions.
“Price gains linked to actual and perceived disruptions to Russian oil exports should more than offset any fall in prices from potentially more Iranian crude oil supply,” Commonwealth Bank of Australia analyst Vivek Dhar was quoted as saying by Reuters.