Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Oil Prices Spike on Fears of Sanctions Against Russia

By Associated Press - Mar 3, 2014 at 1:53PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Gold and stock markets sank in response to developments in Ukraine.

Oil prices jumped nearly $2 a barrel Monday as Russia's military advance into Ukraine raised fears of economic sanctions against one of the world's major energy producers.

By early afternoon in New York, benchmark U.S. crude for April delivery was up $1.80 to $104.39 a barrel. Brent crude, a benchmark for international varieties of crude, was up $1.97 to $111.04 on the ICE Futures exchange in London.

Oil rose, while gold and stock markets sank in response to developments in Ukraine. Russian troops controlled all Ukrainian border posts on the strategic peninsula of Crimea. European and U.S. officials warned Russia against escalating the crisis.

Russia was the world's second-largest producer of oil in 2012, accounting for 12.6% of global supplies, according to the International Energy Agency. It was also the world's top exporter of natural gas in that year, the IEA said. So, any economic sanctions taken against Moscow would limit world supply and push up prices.

"The lion's share of (Russia's) 5 million barrels per day of oil exports go to Europe, so it is hardly surprising that Brent has risen in response to the conflict, even though the risk of actual delivery outages is small," said analysts at Commerzbank in Frankfurt.

Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, said traders are worried about a threat to the global balance of oil supplies.

"Major military events such as this can easily trigger a hoarding mentality in which additional barrels are contracted or moved into inventory as insurance against a major military confrontation," he wrote in a note to clients.

In other energy futures trading on Nymex:

  • Wholesale gasoline rose 2 cents to $3 per gallon.
  • Heating oil added 5 cents to $3.07 per gallon.
  • Natural gas fell 7 cents to $4.54 per 1,000 cubic feet.

link

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
656%
 
S&P 500 Returns
144%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.