The situation in Ukraine spurred oil prices to a more than seven-year high

2022-06-12 0 By

New York, February 14 (Xinhua) –Brent and New York light crude futures hit their highest levels since September 2014, as the international crude oil futures continued to strengthen and rose in late trading on the impact of the Ukraine situation.By the end of the day, light crude for March delivery rose 2.53% to $95.46 a barrel on the New York Mercantile Exchange.London Brent crude for April delivery settled at $96.48 a barrel, up 2.16%.John Kilduff, founding partner of Reinvest Capital Management, said the market remained highly sensitive to the tensions between Ukraine and Russia, which had been heightened to an unusual degree.A phone call between Russian President Vladimir Putin and U.S. President Joe Biden on Wednesday failed to produce a breakthrough, and some moves by Western countries have made investors more worried about an armed conflict between Russia and Ukraine.The US State Department has started the process of temporarily closing the US Embassy in Ukraine and moving its operations from the capital Kiev to the western city of Lviv, US Secretary of State Antony Blinken said in a statement Thursday.Russia is the world’s leading oil and gas exporter, and a conflict with Ukraine or western sanctions would affect its oil and gas exports, which an already tight market could not absorb, JBC Energy said.With the situation so tight, oil and gas prices are likely to be volatile in the coming week.Nishant Bhushan, an analyst at Norwegian oil and gas information service Restar Energy, said any disruption in Russia, a major oil producer, would send Brent and New York futures prices higher.Opec and non-OPEC producers agreed to raise total production by 400,000 b/d per month from August 2021, said Andy Lipo, president of Us oil company Lipo Associates.The market is sceptical of Opec and non-OPEC producers returning to pre-pandemic levels, with Saudi Arabia and Russia the only two countries with significant scope to increase production.Based on market fundamentals, several research houses expect oil prices to top $100 a barrel this year and possibly go higher.Brent futures are expected to average $90 a barrel in March, $95 in June and $100 in December, according to UBS.Goldman Sachs expects Brent crude futures to hit $100 a barrel in the third quarter of this year and rise to $105 a barrel in 2023.