Wednesday, May 29, 2024

Russia-Ukraine war: International oil prices cross $100-mark

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International oil prices broke the $100 per barrel mark, the highest since September 2014, as Russia attacked Ukraine.

The global benchmark Brent crude oil futures on Thursday crossed $100 per barrel mark as Russian President Vladimir Putin declared war against Ukraine.

Brent crude hit a high of $101.34 a barrel in early Asia trade, the highest since September 2014. U.S. West Texas Intermediate (WTI) crude futures jumped $4.22, or 4.6 per cent, to $96.32 a barrel, after rising to as much as $96.51, also the highest since August 2014, according to a Reuters report.

GLOBAL ENERGY SUPPLIES MAY HIT

This has come as Russia moved troops into Ukraine, sparking concerns that a war in Europe could disrupt global energy supplies.

Russia has launched a full-scale invasion of Ukraine and is targeting cities with weapons strikes, Foreign Minister Dmytro Kuleba said in a tweet.

Russian President Vladimir Putin authorised a military operation in eastern Ukraine on Thursday in what could be the start of war in Europe over Russia’s demands for an end to NATO’s eastward expansion.

IMPACT OF RUSSIA-UKRAINE WAR ON OIL PRICES

Russia is the world’s second-largest oil producer, which mainly sells crude to European refineries, and is the largest supplier of natural gas to Europe, providing about 35 per cent of its supply.

“Russia’s announcement of a special military operation into Ukraine has pushed Brent to the $100/bbl mark,” said Warren Patterson, head of ING’s commodity research, adding that the oil market will nervously be awaiting what further action Western nations 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 added.

FORECAST

Additionally, U.S. crude stockpiles rose 6 million barrels last week while distillate stocks fell, according to market sources who were citing American Petroleum Institute figures late on Tuesday.

Ahead of government data on Thursday, analysts forecast a 400,000-barrel build in crude and a drawdown in fuel stockpiles.

Gasoline inventories rose by 427,000 barrels and distillates stockpiles fell by 985,000 barrels, the API data showed according to the sources, who spoke on condition of anonymity.

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Also read: Joe Biden and Vladimir Putin Ukraine summit hangs in balance

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