U.S. oil jumps to highest since 2013 as war sparks supply fears

PanARMENIAN.Net - U.S. oil climbed to the highest level since 2013 during overnight trading Tuesday, March 2, with global benchmark Brent topping $110 per barrel as crude’s blistering rally continues, CNBC reports.

The advance comes as OPEC and its oil-producing allies, which includes Russia, prepare to meet Wednesday to discuss April’s output.

West Texas Intermediate crude futures, the U.S. oil benchmark, jumped more than 5% to trade at $109.23 per barrel, the highest level since at least September 2013. During regular trading the contract gained 8.03% to settle at $103.41 per barrel.

Global benchmark Brent crude rose 5.6% to trade at $110.84, the highest level since July 2014. During Tuesday’s session the contract rose 7.15% to settle at $104.97 per barrel.

“There’s no respite. This is a dramatic moment for the market and the world and supplies,” said John Kilduff, partner at Again Capital. “It’s clear the world is going to have to stand up to Russia by foreclosing its oil exports,” he added, noting it’s oil that the market cannot afford to lose.

Both WTI and Brent surged above $100 last Thursday for the first time since 2014 after Russia invaded Ukraine, prompting supply fears in what is already a very tight market.

“Crude prices can’t stop going higher as a very tight oil market will likely see further risk to supplies as the War in Ukraine unfolds,” said Ed Moya, senior market analyst with Oanda. “Brent crude could surge to the $120 level if the oil market starts to think it is likely that sanctions will be placed on Russian energy.”

On Tuesday member states of the International Energy Agency announced plans to release 60 million barrels of oil reserves in an effort to alleviate the upward march in oil prices. As part of that, the U.S. will release 30 million barrels.