The price of oil surpassed $100 a barrel for second time since the beginning of 2014, as Russia sent troops into Ukraine raising fears that a conflict in Europe could affect the world’s energy supply.
Russia has launched a massive invasion in Ukraine in which it is targeting major cities using weapons strikes the Russian Foreign Minister Dmytro Kuleba announced in an email.
Brent crude hit a peak of $101.34 per barrel in early Asia trading, the highest since September 2014. It was trading at $101.20 one barrel by 0423 GMT at 0423 GMT, an increase of $4.36 or 4.5 percent.
U.S. West Texas Intermediate (WTI) crude futures surged $4.22 or 4.6 percent up to $96.32 for a barrel, following climbing to $96.51 which is which was the highest since August 2014.
Russian Vladimir Putin, the president of Russia Vladimir Putin authorised a military operation in the eastern part of Ukraine on Thursday, in what could be the beginning of conflict in Europe due to Russian demands to end NATO’s eastern expansion. learn more
Russia is the second largest oil producer. It primarily offers crude for sale to European refineries. It’s also the largest provider for natural gas in Europe with around 35% of the supply.
“Russia’s announcement of a special military operation into Ukraine has pushed Brent to the $100/bbl mark,” said Warren Patterson, head of the ING’s research on commodities, adding that the market for oil will be watching closely to see what next steps Western nations will take against Russia.
“This growing uncertainty during a time when the oil market is already tight does leave it vulnerable, and so prices are likely to remain volatile and elevated,” he said.
Brent crude oil has topped $100/barrel in the last time it has been that high since Sept 2014 over Ukraine-Russia tensions
Western nations as well as Japan on Tuesday slapped Russia with fresh sanctions for sending troops into separatist areas of the eastern region of Ukraine and warned of a further punishment should Moscow declared an all-out attack on its neighbor. As of now, there aren’t any sanctions against trade in energy. learn more
Japan and Australia announced on Thursday that they are prepared to take advantage of their oil reserves as well as others International Energy Agency (IEA) member states, if supply were hit by hostilities in Ukraine. learn more
“One factor that could act as a temporary brake on prices is the Iran nuclear deal with rumours swirling around that a new agreement could be announced, possibly as early as this week,” said Jeffrey Halley, senior market analyst at OANDA.
“However Ukraine fears, and their wider ramifications will continue to support oil prices which remain a solid buy on dips.”
It is believed that the U.S. and Iran have been in indirect talks on nuclear issues in Vienna and an agreement could result in the lifting of sanctions on Iranian oil sales and to increase the supply of oil around the world.
Iran on Wednesday , however, the country urged Western countries to become “realistic” in talks to renew the nuclear agreement of 2015 and announced that the country’s top negotiator would be returning to Tehran to discuss the issue which suggests that the possibility of a breakthrough in talks isn’t imminent. learn more
In addition, U.S. crude stockpiles were up 6 million barrels over the week, while distillate stocks declined according to market analysts who were quoting American Petroleum Institute figures late on Tuesday.
In advance of the release of government data for Thursday morning, experts are predicting the crude oil market to grow by 400,000 barrels and a decrease in fuel stocks.
The inventories of gasoline increased by 427,000 barrels, while distillates stocks fell by 985,000 barrels, API figures showed, according to the source, who spoke anonymously.
