Brent crude oil is headed for $95 a barrel. The cause was a Russian missile hitting a transformer in northern Ukraine. The Druzhba oil pipeline, which supplies Hungary, Slovakia and the Czech Republic with Russian oil, has been shut down because of this.
Tensions between Russia and the West
A barrel of Brent crude oil rose by almost three dollars in one day. Investors fear an escalation of tensions between Russia and the West, which, in addition to Russia’s massive missile attack on Ukraine, was also fuelled by the strike on Polish territory just across the Polish-Ukrainian border. A barrel of Brent crude oil traded around the level of $95 per barrel, while North American WTI crude oil shot up to $87 for the same volume unit.
Can we expect oil to get cheaper?
In the medium term, however, we can expect oil to become cheaper. The International Energy Agency (IEA) has lowered its estimate of growth in demand for black gold for the umpteenth time. This stems from the growing expectation that the global economy will slow down, which will also slow down demand for oil. Demand will thus be held up next year mainly by the Asian region, led by China, where economic growth will remain solid.
