Ukraine, Europe Brief News – Oil prices jumped as tensions mounted between Russia and the Western powers over Ukraine.
Leading market participants said they expect that global demand to continue its powerful recovery from the pandemic.
West Texas Intermediate traded near $94 a barrel, and Brent climbed near $96.
This came after Russian President Vladimir Putin officially recognised separatists in eastern Ukraine. A move that could undermine European-mediated peace talks and further escalate tensions with the West.
However, the Kremlin has repeatedly denied it intends to attack Ukraine.
“The concern is that if tension in Eastern Europe escalates further that some of this supply might get disrupted intentionally or driven by political divisions,” affecting not only energy but other commodities, said Giovanni Staunovo, a commodity analyst at UBS Group AG. “I would expect the market to continue to react in a sensitive way.”
Adding to oil’s gains, several of OPEC+’s biggest oil producers want the group to continue with its strategy and add another 400,000 barrels a day of crude to the market in April, according to people familiar with the matter. That comes despite calls for OPEC+ to increase output faster amid tight supplies.
“Demand is going to surge in the second half” and exceed 100 million barrels a day if travel continues to return to normal, Vitol Group CEO Russell Hardy told Bloomberg television. “Eventually we’re going to run out of spare capacity.”
