Brent crude price has soared to $104 dollar a barrel following Russia invasion of Ukraine. April Brent crude, the global benchmark, traded $7.31, or 7.6%, higher at $104.15 a barrel on ICE Futures Europe, with both international and U.S. contracts trading around highs not seen since 2014. Crude-oil futures surged on Thursday with both the U.S. and international benchmarks jumping above $100 for the first time since 2014, as Russian troops and tanks pushed into Ukraine and airstrikes hit the country in an attack on Ukraine authorised by President Vladimir Putin in a televised address to his nation.
West Texas Intermediate crude for April delivery surged $5.59, or 6.1%, to trade at $97.69 a barrel on the New York Mercantile Exchange, after trading as high as $100.54. March natural gas rose 4.9% to $4.85 per million British thermal units ahead of expiration at the day’s settlement. March gasoline added 5.7% to $2.882 a gallon and March heating oil rose 6.8% to $3.02 a gallon. The Russian attack in Ukraine is viewed as the largest such military operation in Europe since World War II and is likely to spark concerns about supply disruptions, during a period of uncertainty in the global economy underpinned by COVID worries and supply-chain bottlenecks. Russia supplies between 30% and 40% of Europe’s natural gas. Analysts have said that the Ukraine conflict increases the risk of disruptions to Russian oil and natgas supplies and sanctions, and the effect of higher oil prices, could exacerbate global inflationary pressures. Prices are anticipating possible U.S.-imposed sanctions on Russia that include crude oil and natural gas, said Stewart Glickman, energy equity analyst at CFRA Research, in emailed commentary.
But CFRA believes President Joe Biden has “little appetite for policy moves that would cause further pain at the pump for U.S. drivers,” he said. So there’s a risk of WTI prices overshooting the mark and settling back in the $90 range, and that would “reflect the existing tight market for crude, but would be absent sanctions that matter.” Biden on Wednesday vowed further sanctions against Moscow. The U.S. already has said it would sanction two Russian banks as well as the country’s sovereign debt. On top of that, Germany halted the certification of the Nord Stream 2 pipeline and the U.S sanctioned the construction company behind the pipeline, which was slated to boost flows of natural gas from Russia to Western Europe.
The Energy Information Administration reported on Thursday that U. S. crude inventories rose by 4.5 million barrels for the week ended Feb. 18. Data were released a day later than usual due to Monday’s Presidents’ Day holiday. On average, analysts had forecast a decline of 300,000 barrels, according to a poll conducted by S&P Global Platts. The American Petroleum Institute late Wednesday reported a 6 million-barrel increase, according to sources. The EIA also reported weekly inventory declines of 600,000 barrels each for gasoline and distillates. The S&P Global Platts survey expected supply declines of 1.1 million barrels each for gasoline and distillates. The EIA data showed crude stocks at the Cushing, Okla., Nymex delivery hub fell by 2 million barrels for the week, while stocks in the Strategic Petroleum Reserve were down by 2.4 million barrels. Separately, the EIA said domestic natural gas supplies fell by 129 billion cubic feet last week. MW
