Oil prices rose nearly 2% on Thursday as escalating tensions between Russia and Ukraine raised concerns about global crude supply. Brent crude futures climbed $1.42 (1.95%) to $74.23 per barrel, while U.S. West Texas Intermediate (WTI) crude increased $1.35 (2%) to $70.10. The conflict intensified after Russian President Vladimir Putin announced a hypersonic missile strike on a Ukrainian military facility and warned of potential retaliation against Western military installations if their weapons were used against Russia.
Ukraine also targeted Russian sites using U.S. and British missiles earlier this week, heightening fears of broader geopolitical disruptions. ING analysts noted the dual risks of potential Ukrainian strikes on Russian energy infrastructure and uncertainty surrounding Russia’s response.
Offsetting some of the upward pressure on prices, U.S. crude inventories rose by 545,000 barrels to 430.3 million barrels for the week ending November 15, surpassing expectations. Gasoline stockpiles also increased more than anticipated, although distillate inventories saw a sharper-than-expected draw, according to the Energy Information Administration.
Elsewhere, China introduced measures to support trade and energy imports, while OPEC+ continues to deliberate delaying planned production increases due to weak global oil demand. The group’s upcoming December 1 meeting will be closely watched, as it may reconsider reversing production cuts initially planned for late 2024 through 2025.
Meanwhile, Chicago Federal Reserve President Austan Goolsbee signaled cautious support for slower interest rate reductions, which could prolong higher borrowing costs, dampening economic activity and energy demand.