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By Myra P. Saefong and Mark DeChambre
SAN FRANCISCO
EnergiesNet.com 02 22 2022
Crude and natural-gas prices climbed sharply on Tuesday, with Brent futures marking their highest settlement since 2014, amid the threat of a full-scale invasion of Ukraine by Russia.
Price action
- Against that backdrop, April Brent oil BRN00, -0.12% BRNJ22, -0.06%, the international benchmark, rose 1.5%, or $1.45, to settle at $96.84 a barrel on ICE Futures Europe after trading as high as $99.50. The front-month contract marked its highest finish since Sept. 29, 2014, according to Dow Jones Market Data.
- West Texas Intermediate crude CL.1, +1.32% CL00, -0.04% for March delivery CLH22, +1.32% added $1.28, or 1.4%, to end at $92.35 a barrel on its expiration day. The April contract CLJ22, -0.04%, which is now the front month, rose $1.70, or 1.9%, to settle at $91.91.
- March natural gas NG00, 0.73% NGH22, 0.73% climbed 1.5%, or 7 cents, to $4.498 per million British thermal units.
- March gasoline RBH22, +0.30% rose 1.5% to $2.711 a gallon
- March heating oil HOH22, -0.34% gained 1.3% to $2.819 a gallon.
Market drivers
Russian President Vladimir Putin, in a speech on Monday, said that he recognized the independence of pro-Moscow separatist factions in Luhansk and Donetsk, Ukraine, and was ordering troops into the breakaway regions as what he referred to as peacekeepers.
“The market has certainly already priced in some degree of Russian related oil and gas supply risk,” said Troy Vincent, senior market analyst at DTN. However, prices saw relatively modest gains, emphasizing that the “market is not taking the threat of Russian oil and natural gas flows being sanctioned or cut off by war seriously,” he said.
“With energy price inflation already weighing on the global and European economy, severe sanctions on Russian oil and gas flows would prove mutually destructive for both Europe and Russia,” said Vincent.
Russia is the third-largest oil producer in the world and the second-largest producer of dry natural gas, according to 2020 data from the U.S. Energy Information Administration.
Read: U.S. drivers brace for the highest prices in 9 years as oil approaches $10o a barrel
Also see: Russia’s move into Ukraine is boosting commodities prices — here’s what’s at stake
The animosities brewing over Ukraine drew a swift rebuke from the international community, with the White House issuing an executive order restricting investment and trade in those regions. On Tuesday, President Joe Biden said the U.S. was sanctioning two Russian banks as well as the country’s sovereign debt, as he blamed Moscow for what he called the beginning of an invasion of Ukraine.
Meanwhile, officials from the European Union described Putin’s latest actions and statements as “a blatant violation of international law.”
See: Here’s the technology being used to watch Russian troops as Ukraine crisis intensifies
Russia is a key supplier of natural gas to Western Europe and the intensification of conflict in Eastern Europe could influence prices. Energy analysts have said that dependence on Russian gas limits Europe’s ability to sanction Moscow if it invades Ukraine.
Some analysts have warned that crude oil could shoot above $100 a barrel if tensions in Ukraine erupt into full-blown war.
marketwatch.com 02 22 2022
