Brent Crude Oil Above $110 A Barrel And Climbing

In another twist and possible impact on fuel prices in South Africa, Brent crude broke above $110 a barrel on Wednesday.

Rise of Brent crude oil

Ukraine invasion

The price per barrel rose by 4.88% in a few hours. Meanwhile, the WTI (West Texas Intermediate, the crude oil benchmark for North America) rose more than 5%.

This comes after the Russian invasion of resource-rich Ukraine threatens supplies and caused both Brent crude and the WTI to hit record highs since 2014.

Russia is the world’s third largest oil producer and the price per barrel rocketed after the world imposed severe sanctions on Moscow.

Global lockdowns

It should be noted, however, that oil prices were already fluctuating before Russia declared war, mainly due to supply constraints due to global lockdowns.

Speaking to Bloomberg TV, CenterSquare Investment Management’s Uma Pattarkine said the market expected up to seven rate hikes anywhere in 2022.

Meanwhile, President Joe Biden said in his State of the Union address that the United States would release about 60 million barrels to “temper” the rise in crude oil prices.

Key figures on Wednesday

At 5 a.m. South African Standard Time, North Sea Brent oil was up 5.6% a barrel and was now trading at $110.87, while WTI was up 5.7% and trading at $109. .22 a barrel.

In Tokyo, the Nikkei 225 fell 1.9%, while the Hang Seng index in Hong Kong fell 0.9%.

The implementation of the rules of the Self-Adjusting Slate Mechanism – effective from March 2, 2022 – and the Rand/US Dollar exchange rate also affect the South African fuel price.

Fuel price in SA

“The combined cumulative Slate balances of petrol and diesel were negative R5.102 billion at the end of January 2022,” the DMRE said in a statement.

The Rand per USD rose slightly on average against the US dollar over the reporting period (from 15.51 to 15.23) compared to the previous period.

As of March 2, fuel prices will be adjusted as follows:

  • The price of petrol (both 93 and 95 ULP & LRP) will increase by R1.46/l,
  • Diesel (0.05% sulfur) will rise at R1.44/l,
  • Diesel (0.005% sulfur) will rise at R1.48/l,
  • Luminous paraffin (wholesale) with R1.21/l,
  • Maximum sales price LPG with 70 cents/kg.

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