Title: Oil prices jump as Ukraine conflict stokes supply concerns

Mar 01, 2022 02:45AM ET

By: AnalysisWatch

Oil prices rose on Tuesday as fears of possible supply disruptions following Russia's invasion of Ukraine outweighed rumors of a coordinated global oil stockpile release to calm markets.

On Tuesday, May Brent crude futures rose 1.8 percent to $99.7 per barrel at 0734 GMT, after briefly reaching $100.The benchmark reached a seven-year high of $105.79 after Russia's invasion of Ukraine last week.

The April contract for West Texas Intermediate crude in the United States rose 1.6 percent to $97.28 after reaching a high of $99.10 a barrel the day before and rising more than 4 percent.

Concerns about supply constraints pushed prices higher as peace talks between Russia and Ukraine ended on Monday and officials returned to their respective capitals for further consultations, suggesting no solution to the conflict is imminent.

Major oil and gas companies, such as BP and Shell, have revealed plans to withdraw their Russian operations and joint ventures.

Buyers of Russian oil have faced difficulties with payments and ship availability since Western sanctions came into force in response to the invasion of Ukraine.

Meanwhile, Asian factories recovered quickly in February on signs that the coronavirus pandemic is having less of an impact on the economy, suggesting an increase in oil demand.

However, market sentiment was boosted by the fact that the US and its allies were negotiating a coordinated oil stockpile release to alleviate supply shortages. According to media reports, this release could amount to 60-70 million barrels.

Russia, which describes its intervention in Ukraine as a special operation, exports about 4-5 million barrels of oil and 2-3 million barrels of finished products per day.