Brent Crude Oil was loitering around the illustrious £100 per barrel mark, after reaching the staggering heights of £132. Was this a good time to buy, or are external factors working for oil prices beginning to fade away? Watch today's Brent oil forecast.
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During my last Oil forecast video, I provided an update to the deeply saddening events coming out of Ukraine as this is heavily influencing oil prices at the moment. I have been providing updates to the war in Ukraine in each video. Today’s update does not get much better in terms of a violence perspective, with lives continuing to be lost needlessly in this war. However, there is some optimism around in the form of peace talks. With the Russian army continuing to be bogged down but making slow progress, it was reported Ukraine was offered the chance to have ‘Austrian-style’ neutrality. Both parties remain distant in their negotiations for peace. This is a factor that favors oil remaining above £100 per barrel.

How are sanctions affecting the price? Well, the UK only important 6% of oil from Russia, so it is nowhere near as dependent as other European countries. However, the price is still affected by global shifts in prices of oil denoted in dollars. Analysts spoke with MP’s on the Treasury Committee on Monday, and they seemed to believe the recent fall to be temporary. Essentially, the greater the loss of Russian oil to the global market, the higher the price will go, at least for the next few weeks or months. Therefore, the outcome of this war is critical. The more Putin presses in Ukraine, the harsher the sanctions are likely to be, and the more damaging to the global oil market this will be. This of course works the other way too though, which is why it is important to keep up to date with the current affairs in the war.

Looking at the demand outlook though, it still remains high. Countries are experiencing high inflation, and the global economy is bouncing back admirably. The supply of oil was already struggling to keep up with demand before this war broke out, how can it cope now? Higher prices will damage demand in the long term, and therefore the switch to other sources may be accelerated. In the short term, the pressure will be on to keep supply levels high which puts OPEC under pressure.

To conclude, this likely means oil prices haven’t seen their peak yet. Even after the aggression calms, the world will want Putin to pay for his actions. This is likely to keep sanctions in place, with some even thinking this will turn into a cold war. This leaves oil prices vulnerable to more hikes. Let us take a look at the chart now.

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00:00 - Intro
00:55 - Russia/Ukraine Conflict
01:50 - The Affect of Sanctions
02:40 - Supply & Demand Outlook
03:19 - Brent Crude Outlook
03:46 - Winning Oil Trade Explained

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