Crude oil rose on Wednesday to hit $90 a barrel for the first time in seven years, supported by tight supplies and rising political tensions between Russia and Ukraine added to concerns about further disruptions in an already tight market.
Brent crude gained $1.76, or 2%, to close at $89.96 a barrel, after breaking above $90 for the first time since October 2014. U.S. crude (WTI) closed up $1.75 , or 2%, to $87.35 a barrel.
Oil prices pared their gains in post-closing trading, pulling back with other risky assets such as equities after investors interpreted U.S. Federal Reserve Chairman Jerome Powell’s comments at a news conference on expected increases. of interest rates as a bit “hawkish” (inclined towards withdrawing stimulus).
Russia has amassed thousands of troops on Ukraine’s border, stoking fears of an invasion. Energy market prices rose on concerns that Russian gas supplies to Europe could be disrupted. Russia is also one of the biggest oil exporters in the world.
US Secretary of State Tony Blinken said the country will ensure that global energy supplies are not disrupted if Russia takes action.
“Markets are nervous that physical supply could be disrupted,” said Paul Sheldon, chief geopolitical analyst at S&P Global Platts. “Flows are likely to continue, but the risks are not negligible that something could affect physical balances.”