Oil rises as Putin claims hypersonic missile fired at Ukraine
Markets concerned about supply disruptions should Ukraine attack Russian oil installations
21 November 2024 - 08:22
UPDATED 21 November 2024 - 22:17
bySiyi Liu
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Houston — Oil prices rose about 1% on Thursday after Russia and Ukraine launched missiles at each other, as markets feared for crude supply if the conflict widened.
Russian President Vladimir Putin said on Thursday Russia had launched a hypersonic medium-range ballistic missile attack on a Ukrainian military facility, and warned that Moscow could strike the military installations of any country whose weapons were used against Russia.
Putin said the West was escalating the conflict in Ukraine by allowing Kyiv to strike Russia with long-range missiles, and that the war was becoming a global conflict.
Ukraine fired US and British long-range missiles at targets in Russia this week despite warnings by Moscow that it would regard such action as a major escalation.
Brent crude futures rose 80c, or 1.1%, to $73.61 a barrel by 6.05pm GMT. West Texas Intermediate was up 78c or 1.11%, to $69.52.
“The market’s focus has now shifted to heightened concerns about an escalation in the war in Ukraine,” said Ole Hvalbye, commodities analyst at SEB.
Russia is the second-largest crude oil exporter after Saudi Arabia, so major disruptions could affect global supplies.
“For oil, the risk is if Ukraine targets Russian energy infrastructure, while the other risk is uncertainty over how Russia responds to these attacks,” ING analysts said in a note.
Weighing on the market was a rise in US crude inventories of 545,000 barrels to 430.3-million barrels in the week ended November 15, exceeding analysts’ expectations.
Petrol inventories last week rose more than forecast, while distillate stockpiles posted a larger-than-expected drawdown, according to the Energy Information Administration data.
China on Thursday announced policy measures to boost trade, including support for energy product imports, amid concerns about US president-elect Donald Trump’s threats to impose tariffs.
Opec+ may push back output increases again when it meets on December 1 due to weak global oil demand, according to three sources in the cartel who are familiar with the discussions.
The group, which combines Opec states and allies including Russia, pumps about half the world’s oil. It had initially planned to gradually reverse production cuts from late 2024 and through 2025.
Meanwhile, Chicago Federal Reserve president Austan Goolsbee on Thursday reiterated his support for further interest rate cuts and his openness to doing them more slowly.
Slower-than-expected interest rate cuts keep the cost of borrowing elevated for longer, which can slow economic activity and dampen demand for oil.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil rises as Putin claims hypersonic missile fired at Ukraine
Markets concerned about supply disruptions should Ukraine attack Russian oil installations
Houston — Oil prices rose about 1% on Thursday after Russia and Ukraine launched missiles at each other, as markets feared for crude supply if the conflict widened.
Russian President Vladimir Putin said on Thursday Russia had launched a hypersonic medium-range ballistic missile attack on a Ukrainian military facility, and warned that Moscow could strike the military installations of any country whose weapons were used against Russia.
Putin said the West was escalating the conflict in Ukraine by allowing Kyiv to strike Russia with long-range missiles, and that the war was becoming a global conflict.
Ukraine fired US and British long-range missiles at targets in Russia this week despite warnings by Moscow that it would regard such action as a major escalation.
Brent crude futures rose 80c, or 1.1%, to $73.61 a barrel by 6.05pm GMT. West Texas Intermediate was up 78c or 1.11%, to $69.52.
“The market’s focus has now shifted to heightened concerns about an escalation in the war in Ukraine,” said Ole Hvalbye, commodities analyst at SEB.
Russia is the second-largest crude oil exporter after Saudi Arabia, so major disruptions could affect global supplies.
“For oil, the risk is if Ukraine targets Russian energy infrastructure, while the other risk is uncertainty over how Russia responds to these attacks,” ING analysts said in a note.
Weighing on the market was a rise in US crude inventories of 545,000 barrels to 430.3-million barrels in the week ended November 15, exceeding analysts’ expectations.
Petrol inventories last week rose more than forecast, while distillate stockpiles posted a larger-than-expected drawdown, according to the Energy Information Administration data.
China on Thursday announced policy measures to boost trade, including support for energy product imports, amid concerns about US president-elect Donald Trump’s threats to impose tariffs.
Opec+ may push back output increases again when it meets on December 1 due to weak global oil demand, according to three sources in the cartel who are familiar with the discussions.
The group, which combines Opec states and allies including Russia, pumps about half the world’s oil. It had initially planned to gradually reverse production cuts from late 2024 and through 2025.
Meanwhile, Chicago Federal Reserve president Austan Goolsbee on Thursday reiterated his support for further interest rate cuts and his openness to doing them more slowly.
Slower-than-expected interest rate cuts keep the cost of borrowing elevated for longer, which can slow economic activity and dampen demand for oil.
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.