The price of crude oil soared Wednesday morning as Russian forces pushed into Ukraine, with futures for international benchmark Brent crude topping out at more than $113 a barrel.
Futures for the U.S. benchmark West Texas Intermediate also saw a sharp hike, increasing by 8% to trade at $112.51 per barrel, its highest point since 2011.
The news comes just one day after 31 countries, including the United States, announced the coordinated emergency release of 60 million barrels of their strategic reserves in order to lessen supply constraints and help reduce reliance on Russian energy suppliers.
Still, the release did little to calm panicked investors.
BIDEN TO RELEASE 30M MORE BARRELS FROM STRATEGIC OIL RESERVE AS PRICES CLIMB
“We do not view this as sufficient relief,” Goldman Sachs said in a note to its clients in the hours following the International Energy Agency’s announcement. “Demand destruction — through still higher prices — is now likely the only sufficient rebalancing mechanism, with supply elasticity no longer relevant in the face of such a potential large and immediate supply shock.”
“There’s no respite” from the shortage, John Kilduff, a partner at Again Capital, told CNBC Wednesday morning. “This is a dramatic moment for the market and the world and supplies.”
Others warned that prices could climb higher still, especially if the U.S. and other allied nations take steps toward sanctioning Russia’s energy supplies.
“Brent crude could surge to the $120 level if the oil market starts to think it is likely that sanctions will be placed on Russian energy,” Ed Moya, a senior market analyst with Oanda, told CNBC.
The news comes as OPEC members gathered Wednesday to discuss their oil production plans for the coming months. But leaders from the group of oil-producing nations, which is co-chaired by Russia, said outright that they have no intention of increasing their production, even amid the massive hike in prices.
In a statement Wednesday, OPEC made no mention of Ukraine — referencing instead to broad “geopolitical developments” that it said were the driver of violability.
Meanwhile, natural gas prices in Europe are also on the rise. Prices shot to $64 per million British thermal units this morning before falling back down to around $52 per MMBtu, demonstrating severe anxiety within the market over supply going forward due to the Russia-Ukraine conflict.
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“The market clearly fears that the Russians will pull the plug on the supply at any point of time,” analysts with Energi Danmark said in their daily market assessment note.
