SULAIMANI (ESTA) — Crude oil prices rose again on Wednesday while Asian stocks struggled for footing as investors assessed the impact of the worsening conflict in Ukraine and a new U.S. ban on Russian oil.
Global benchmark Brent rose $2.59 to $130.6 per barrel at 0726 GMT.
U.S. West Texas Intermediate crude was up $2.06 at $125.8 per barrel.
“It’s not really … a risk-on rally. It’s more that investors have got less reason to sell than they previously did, nothing’s really come through to change sentiment around, and you’ve probably got some short covering in there,” Reuters quoted Matt Simpson, senior market analyst at City Index in Sydney as saying.
The price of a barrel of crude, already on the march higher in January on supply worries and expectations of a strengthening global economic recovery, has rocketed upward since Russia launched its invasion of Ukraine on Feb. 24. Oil is now roughly double its early December low.
Risking even higher U.S. fuel prices that could curb economic growth, President Joe Biden on Tuesday imposed an immediate ban on Russian oil and other energy imports in retaliation for the invasion, amid strong support from American voters and lawmakers.
The ban caps sweeping U.S. and European sanctions imposed on Moscow for launching the largest war in Europe since World War Two. Russian strikes have targeted Ukrainian cities and killed hundreds of civilians.
Britain also announced it will phase out imports of Russian oil and oil products by the end of 2022.
“The oil shock by nature is an accruing one, not a one-off, and the potential for the market to hit $150 before returning to $100 is easier for investors to digest,” said Stephen Innes, managing partner at SPI Asset Management, according to Reuters.
“Putting in force sanctions without first developing surrogate supply contingencies risks Brent crude (going) much higher.”
