London, Thursday, 03 March 2022
Oil prices jumped more than 5% on Thursday, with Brent crude briefly reaching $119.7 a barrel, its highest since May 2012, and WTI futures reaching $116 a barrel, a level not seen since September 2008, as traders keep an eye on the Ukraine conflict and its impact on oil supply, as well as shipping disruptions caused by Russian sanctions.
Meanwhile, as fears of sanctions and supply disruptions continued to dominate market sentiment, EU natural gas prices rose to a new all-time high of €199 per megawatt-hour, before limiting gains around €180 on Thursday.
According to the White House, the imposed sanctions do not specifically target Russia's energy industry at this time, but they are being studied.
Additionally, present restrictions make it more difficult for Russian warships to supply energy supplies by restricting access to European ports.
Traders expected reprisal from Russia and Belarus when tougher sanctions were imposed, with Belarus earlier threatening to block natural gas exports while Russia stated that it would continue to export natural gas.
In addition, the Ukraine war has reached a new phase, with increased heavy shelling that could destroy critical pipelines.
While current gas stockpiles are at historic lows, European utilities face the possibility of not being able to refill gas storages before the next winter season.
(Written and edited by: The Decision Maker)
