Oil futures headed higher on Monday, with prices eyeing their highest settlements in more than seven years as traders weigh developments tied to the Russia-Ukraine crisis, which may disrupt an already tight global crude-oil market.
Russia’s top diplomat urged further talks with NATO and the European Union over Ukraine on Monday. U.S. and global crude benchmarks had ended Friday at seven-year highs Friday after Jake Sullivan, the White House national security adviser, warned that a Russian invasion of Ukraine could occur “any day now.”
PRICES
- West Texas Intermediate crude for March delivery rose $2.36, or 2.5%, to settle at $95.46 a barrel on the New York Mercantile Exchange — the highest front-month contract finish since Sept. 3, 2014, according to Dow Jones Market Data.
- April Brent crude, the global benchmark, rose $2.04, or 2.2%, at $96.48 a barrel on ICE Futures Europe for the highest settlement since Sept. 29, 2014.
- March gasoline climbed 1.5% to $2.779 a gallon, while March heating oil added 1.8% to $2.962 a gallon.
Speaking at the beginning of a televised meeting with Russian President Vladimir Putin on Monday, Foreign Minister Sergei Lavrov suggested Moscow should continue to talk with the U.S. and its allies even though they have rejected Russia’s main security demands. Lavrov’s remarks came after the weekend saw no signs of a diplomatic breakthrough over Ukraine. Russia has amassed over 100,000 troops on the country’s border but has denied plans to invade.
A Russian invasion of Ukraine has been seen as likely pushing oil above $100 a barrel, at least temporarily, while Russia’s role as a key energy supplier to Europe could make for a broader energy shock. But Lavrov’s remarks appeared to trigger some relief across financial markets, with U.S. benchmark stock indexes trading mixed. Treasury yields, which had been pulled down as investors sought safety in traditional havens like government bonds, also ticked higher.
Oil prices briefly moved lower Monday on “possible progress in a resolution to the Russia/Ukraine situation, Phillip Streible, chief market strategist at Blue Line Futures, told MarketWatch. However, prices could “easily see $100 if no agreement is reached and escalation continues.” For now, “the crude market is likely to remain on edge as any geopolitical news could spark additional volatility,” said Brian Swan, senior commodity analyst at Schneider Electric, in a daily note.
Meanwhile, a snowstorm in the Northeast and forecasts for colder weather in the West later this month rekindled buying interest for natural gas, lifting prices for the fuel, said Christin Redmond, commodity analyst at Schneider Electric, in a note.
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