Oil surges to highest since 2014 as more Russia sanctions loom

Bloomberg

Oil soared as the Russian invasion of Ukraine continued to raise the specter of major global supply disruption.
Futures in New York climbed as much as 6.1% to, the highest since 2014. Brent futures jumped by more than $6 to above $104 a barrel. The European Union is discussing the exclusion of seven Russian banks from the SWIFT messaging system, including VTB Bank PJSC. It’s the latest in a list of mounting financial penalties against Russia, one of the world’s largest oil producers.
Banks including Goldman Sachs Group Inc, Morgan Stanley and JPMorgan Chase & Co have boosted their oil price forecasts, anticipating possible supply disruptions. Consultant OilX said the probability of heavy disruption of seaborne Russian crude and products is growing, which could push prices above $150 a barrel.
To temper the rally, the US and other major consuming nations are considering releasing 60 million barrels of strategic reserves, according to people familiar with the matter. That would be equivalent to less than six days of Russian output, and traders are weighing the potential impact. The International Energy Agency was expected to hold an extraordinary ministerial meeting, Executive Director Fatih Birol said.
The invasion of Ukraine has upended commodity markets from oil to natural gas and wheat, piling inflationary pressure on governments. While the US and Europe have so far stopped short of imposing sanctions directly on Russian commodities, the trade in those raw materials is seizing up as banks pull financing and shipping costs surge. Russia is the world’s third-biggest oil producer along with Saudi Arabia.
“The only thing we can expect for sure is that extraordinary levels of headline risks will continue to create a very difficult trading environment,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S.
The turmoil sparked by the invasion will bring a new challenge in balancing a tightening market for Opec+, which meets on Wednesday to discuss output policy. Delegates said the cartel will probably stick to its plan of only gradually increasing supply.
West Texas Intermediate for April delivery rose 4.5% to $100.01 a barrel in New York.
Brent for May settlement gained 4.9% to $102.77.