US Oil Closes Near $95 After Spiking to $119
US crude oil prices closed below $100 per barrel on Monday (March 9), following a volatile intraday rally triggered by the Iran war and the closure of the Strait of Hormuz, while G7 energy ministers were scheduled to discuss options for releasing oil stocks to mitigate supply disruptions.
The West Texas Intermediate (WTI) contract rose 4.26% to close at $94.77 per barrel. However, WTI briefly surged to $119.48 in overnight trading, as Gulf Arab states cut production and the Strait of Hormuz remained closed due to threats from Iran.
Brent oil, the global benchmark, was last recorded at $98.70 per barrel, up 6.48% after earlier touching $119.50. The surge marked the return of oil prices to the $100 per barrel mark for the first time since Russia's invasion of Ukraine in 2022, before retreating from session peaks.
Sources quoted by CNBC said G7 energy ministers will hold a virtual meeting on Tuesday morning to discuss the possibility of jointly releasing oil reserves. Any decision regarding the release of reserves is expected to be made after the meeting.
Policy signals are already emerging from the fiscal channel. G7 finance ministers, who held a virtual meeting on Monday, stated they are "ready to take necessary steps," including supporting global energy supplies through stock releases. G7 members include Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
From a fundamental perspective, the closure of the Strait of Hormuz has tightened physical supplies and raised risk premiums, as approximately 20% of global oil consumption is exported through this route. Consultancy Rapidan Energy views this situation as the largest oil supply disruption in history, leaving the market vulnerable to news of escalation or de-escalation.
In terms of projections, Rystad Energy estimates Brent could rise above US$110 per barrel if current conditions persist for two months, and potentially reach US$135 per barrel if they persist for four months, according to a market note released Monday.
Market participants will be monitoring the outcome of the G7 energy ministers' meeting and the possible release of reserves, developments in the Strait of Hormuz and the response of Gulf production states, and how quickly intraday volatility subsides or intensifies as supply uncertainty persists.
Source: Newsmaker.id
