Oil prices jumped to an eight-year high last week, amid growing fears of a Russian invasion against Ukraine. The US State Department warned that an attack against Ukraine might take place at any time, while many countries, including the US, the UK, and Israel are warning citizens to leave Ukraine and are evacuating personnel from their embassies. Oil price benefitted from mounting geopolitical tensions and WTI rose almost to $96 per barrel on Monday.
On Tuesday, however, Russia stated that it would remove some of its troops from the Ukrainian border, in a move that was seen as an attempt to defuse the crisis. Oil prices dropped rapidly after the announcement, reaching $90.7 per barrel. NATO however expressed doubts that there was the withdrawal of Russian troops and the situation remains critical. Secretary-general of NATO Jens Stoltenberg stated that there is no evidence of de-escalation and that Russia was building up troop numbers. The Kremlin denied the allegations but US Secretary of State Antony Blinken backed up the claims, reporting that another 7,000 troops have been added to the already sizeable forces of Russian forces near the Ukrainian borders, with the latest tally exceeding 150,000 troops. In addition, the largest cyberattack in the history of Ukraine was launched against two of its banks and its defense ministry, with the Ukrainian side accusing Russia of launching a cyberwar against its institutions.
The price of oil has been increasing over the past months, as existing international inventories are tight and supply is trying to catch up with rising demand. US crude oil inventories released on Wednesday however, increased unexpectedly by 1.1 million barrels, putting pressure on the price of oil. In addition, there are reports that Iran could add 900,000 barrels a day in the future if a deal with the US is struck over its nuclear program.
Oil price climbed again early on Thursday, reaching up to $93.3 per barrel, boosted by mounting tensions between Russia and Ukraine. Reports of the nuclear deal with Iran though checked its ascend and WTI traded sideways for the remainder of the day. WTI is still trading in an uptrend, but in case the uptrend is reversed, support may be found at the $82.4 per barrel level and further down around $78.8 per barrel and $77.8 per barrel.
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