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’s capital in an attack on Ukraine authorized by President Vladimir Putin in a televised address to his nation.
April Brent crude
the global benchmark, traded $6.53, or 6.7%, higher at $103.37 a barrel on ICE Futures Europe, with both international and U.S. contracts trading around highs not seen since 2014.
The Russian attack in Ukraine is viewed as the largest such military operation 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.
“Fears over supply disruptions have sent crude oil prices surging further,” said Fawad Razaqzada, market analyst at ThinkMarkets.
Still, “prices do appear severely overbought and there is a risk of a pullback in the not-too-distant future,” he said, in a market update.
“Once source of support could come in from expectations of higher Iranian exports, he said, adding that Iran’s Foreign Minister Hossein Amir-Abdollahian, earlier this week, said that he hopes outstanding issues in negotiations with world powers to restore the 2015 nuclear deal will be resolved in the ‘next few days’.”
President Joe Biden on Wednesday condemned the Russian invasion and 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.
Weekly U.S. petroleum supply data from the Energy Information Administration will be released at 11 am Eastern time. The data were delayed by a day due to Monday’s Presidents Day holiday.
On average, analysts expect the report to show inventory declines of 300,000 barrels for crude and 1.1 million barrels each for gasoline and distillates, according to an S&P Global Platts survey.
The American Petroleum Institute reported late Wednesday that U.S. crude supplies rose by about 6 million barrels for the week ended Feb. 18, according to sources