Oil prices surge more than 2% as Russian President mobilizes more troops

Oil jumped more than 2 percent on Wednesday after Russian President Vladimir Putin announced a partial military mobilization, Reuters reported.

The move is seen as escalating the war in Ukraine and raising concerns of tighter oil and gas supply.

Brent crude futures rose $2.28, or 2.5 percent, to $92.90 a barrel by 0707 GMT after falling $1.38 the previous day.

U.S. West Texas Intermediate crude was at $86.16 a barrel, up $2.22, or 2.6 percent.

Putin said he had signed a decree on partial mobilization beginning on Wednesday, saying he was defending Russian territories and that the West wanted to destroy the country.

The escalation will lead to increased uncertainty over Russian energy supplies, said Warren Patterson, head of commodities research at ING.

“The move could possibly lead to calls for more aggressive action against Russia in terms of sanctions from the west,” he said.

Oil soared and touched a multi-year high in March after the Ukraine war broke out.

Meanwhile, the United States said that it did not expect a breakthrough on reviving the 2015 Iran nuclear deal at this week’s U.N. General Assembly, reducing the prospects of a return of Iranian barrels to the international market.

The OPEC+ producer grouping – the Organization of the Petroleum Exporting Countries and associates including Russia – is now falling a record 3.58 million barrels per day short of its production targets, or about 3.5 percent of global demand. The shortfall highlights the underlying tightness of supply in the market.

Investors this week have been bracing for another aggressive interest rate hike from the U.S. Federal Reserve that they fear could lead to recession and plunging fuel demand.

The Fed is widely expected to hike rates by 75 basis …read more

Source:: News Wire