Oil prices spiked higher on Tuesday following news Russia had ordered troop into Ukraine, significantly increasing concerns of war in the region.
Brent Oil futures traded at $99.45 per barrel in early trade on Tuesday, before the rally faded into the afternoon session in London.
It is reported Russia moved troops into eastern regions of Ukraine in what Russia called a ‘peacekeeping’ mission. The move was met by a wave of sanctions from the West, with more promised in the coming days.
In a major development for energy markets, Germany halted the approval of the Nord Stream 2 pipeline. Germany gets around half of it’s gas from Russia.
“With Putin’s order to put boots on the ground in breakaway regions of Eastern Ukraine, fears that war will be increasingly impossible to avoid has jolted financial markets,” Susannah Streeter, senior investment and market analyst, Hargreaves Lansdown.
“The ominous turn of events has escalated the already highly tense situation, with chances of a diplomatic breakthrough fading away and the fresh sanctions set to hit Moscow. A barrel of Brent crude leapt 2.3% up above $97 dollars, its highest level since September 2014 amid nervousness of a constraint of supply from Russia, at a time of high global demand and lower inventories elsewhere.”
Brent Oil Price
Brent Oil prices rose to trade as high as $99.45 per barrel, the highest level in six years, as markets learnt of developments in Eastern Europe.
Traders sold into the rally as oil prices approached $100, but analysts felt there was a strong chance this level on Brent Oil could be breached.
“We have Brent Oil trading at 6yr highs right now and there’s every chance we could see prices above $100 soon depending on Russia’s response to economic sanctions,” said Walid Koudmani, chief market analyst at financial brokerage XTB.
