US crude futures were modest on Wednesday as investors continued to watch the latest developments in the Russia-Ukraine crisis.
“The immediate rise in oil prices to $ 100 is still visible, but the growing prospect that an Iran nuclear deal could be reached in the coming days could put a temporary hurdle on it,” said Edward Moyya, a senior market analyst at OANDA.
For now, US crude reference prices should remain around $ 90 “until a major update on talks on the Iran nuclear deal or if the new Cold War leads to a military conflict,” he said.
West Texas Intermediate crude for April delivery was up 0.2% at $ 92.10 a barrel on the New York Mercantile Exchange.
Brent crude was up 1.5% at $ 98.32 a barrel, after hitting $ 99.50 on Tuesday, the highest level since September 2014.
April delivery gas futures gained 2.8% to close at $ 4,623 per UK thermal unit.
Ukraine declared a state of emergency on Wednesday and told its citizens in Russia to leave, while Moscow began evacuating its embassy in Kiev at the last ominous sign for Ukrainians fearing a full-scale Russian military offensive.
Prices also rose on Tuesday amid fears that Western sanctions on Russia after it sent troops to Donetsk and Luhansk could hurt energy supplies. Sanctions imposed by the United States, the European Union, Britain, Australia, Canada and Japan focused on Russian banks and elites, while Germany suspended NordStream 2 certification.
Analysts expect oil prices to continue to see support from the Russia-Ukraine crisis, with some Western countries promising to impose more sanctions if Russia launches a full-scale invasion.
“There is a risk that Russia will reciprocate the sanctions by reducing deliveries of its own free will,” said Commerzbank analyst Carsten Fritsch.
The possible return of more Iranian crude to the market has pushed prices as Tehran and world powers move closer to reviving a nuclear deal.
However, analysts say there is little chance of Iranian crude returning to the market in the near future to ease the current tight supply.
Source: Capital
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