Oil hits seven year high of $110 a barrel despite emergency measures to address Ukraine fears
Prices are set to climb further amid Russia’s invasion of Ukraine
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Your support makes all the difference.The price of oil has surged past $110 a barrel despite moves to soothe markets worried by Russia’s invasion of Ukraine.
Brent crude, the global benchmark for oil prices, has reached its highest price in seven years.
The rise came despite a global agreement to stabilise supply by releasing 60 million barrels of oil from emergency reserves.
Russia is one of the world’s biggest energy producers and investors are concerned about the conflict’s effect on oil and gas supplies.
In the UK, the average price of petrol hit a record high of £1.51 a litre on Sunday, while diesel increased to £1.55, according to the RAC.
Brent crude rose more than 5.8% to $111.09 on Wednesday, its highest since early July 2014.
In the US, West Texas Intermediate crude jumped nearly 6% to $109.30, its highest since September 2013.
“Markets dismissed the notion that 60 million barrels of strategic reserves released will be consequential to the risks of Russian supply jeopardized,” said Tan Boon Heng of Japan’s Mizuho Bank. “Russia pumps more than that in just six days.”
Meanwhile global sanctions have prompted a string of major companies to cut ties with Russia.
Natural gas company Exxon Mobil said it would pull out of its operations in the country, including oil production fields, following similar decisions by oil giants BP and Shell.
“We think that there is some room still for oil prices to continue to climb,” said Carlos Casanova, senior Asia economist at Union Bancaire Privée in Hong Kong.
“So much of it depends upon political factors and making sure that some of the supply coming out of Russia is offset with (not just) more oil from US shale, but also Iran.”
Share prices in Europe and the US fell further yesterday, and the FTSE 100 turned negative amid fears over the impact of the conflict in Ukraine and the effect of sanctions.
In the currency market, the dollar rose 1.88% against the rouble to 107.01, after touching a record high of 117 a day earlier.
“The Russia-Ukraine conflict will probably continue to dominate markets for the foreseeable future,” analysts from the financial services firm ING said.
They added: “Support for starting the EU membership process for Ukraine shows the unity of support for Ukraine from Western Europe but is unlikely to help calm tensions.”
In a further tightening of restrictions on Moscow, the United States banned Russian flights using American airspace, following similar moves by the European Union and Canada.
US President Joe Biden vowed Vladimir Putin would “pay a continuing high price” for the invasion of Ukraine.
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