Prices for oil jumped more than 2 percent on Monday to their highest level in more than seven years, following claims by Ukrainian President Petro Poroshenko that Russia was planning an invasion on Wednesday.
Fears of a Russian invasion of Ukraine, one of the world’s top oil and gas producers, have pushed oil prices closer to $100 per barrel.
A partner at Again Capital in New York, John Kilduff stated, “The market remains hyper-sensitive to developments concerning the Russian/Ukraine crisis.” “This is currently at an all-time high in intensity. It’s purchase now, ask later at the moment.”
Brent crude increased by $2.04, or 2.2%, to $96.48 per barrel before settling at a record high of $96.78 recorded in September 2014.
On Tuesday, U.S. West Texas Intermediate (WTI) crude settled at $95.46 a barrel, up $2.36 or 2.5% from its previous high of $95.82 set in September 2014.
On Wednesday, Volodymyr Zelenskiy, Ukraine’s president, said he had been told that Russia would invade the country.
There is no “concrete indicator” of de-escalation by Russian soldiers on the Ukrainian border, according to the State Department. It was not obvious if Russia was interested in a diplomatic solution, according to the State Department’s statement.
Noting the “dramatic escalation in the buildup of Russian forces,” Secretary of State Antony Blinken announced that the US Embassy in Ukraine was moving from Kyiv to Lviv in the west.
A large number of Russian troops have been stationed on Ukraine’s borders, but Moscow rejects any preparations to invade and accuses the West of panic.
U.S. officials cautioned Sunday that Russia may invade Ukraine at any time and could use a pretext for an attack that was not previously known to the international community. [MKTS/GLOB]
Nishant Bhushan, the senior oil market analyst for Rystad Energy, said Russia is one of the world’s top crude oil producers, with a capacity of about 11.2 million barrels per day.
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As nations recover from the pandemic, Brent and WTI prices will soar far beyond $100 if oil flows from the region are disrupted, according to Bhushan’s analysis.
It has been a challenge for the Organization of Petroleum Exporting Countries (OPEC) and its partners, known as OPEC+, to meet their monthly agreements to boost output by 400,000 barrels per day (bpd) until March.
Ex-IEA chief Fatih Birol has encouraged the Organization of the Petroleum Exporting Countries (OPEC+) to act in accordance with its words.
The International Energy Agency (IEA) has stated that the gap between the OPEC+ target and actual output has worsened.
US-Iran negotiations are also being closely followed by investors. According to the Iranian foreign minister, Tehran is eager to reach a solution on nuclear issues as soon as possible, as long as its national interests are safeguarded in the process.
As the Economist Intelligence Unit’s Middle East and Africa editorial director, Pratibha Thaker, noted, “A nuclear deal between the United States and Iran could unleash 1.3 million barrels of supplies, but this will not be sufficient to ease supply limitations.”
