Oil prices rose to an 8-year high amid possible Russian aggression against Ukraine

Last week, oil prices continued to rise and reached the highest level since October 2014 – 9 95/barrel, adding 23% in 8 weeks amid the growing threat of Russia's invasion of Ukraine.

On Friday, after the statement of the US National Security Adviser on intelligence data on the offensive planned for February 16-17, Brent oil prices reached 9 96/barrel. Russia's military invasion of Ukraine could hinder oil supplies from Russia and provoke US sanctions.

April Brent crude futures on Friday rose 3.3% to 9 94.5/barrel, and over the weekend reached 9 95.6/barrel, while March futures for US WTI rose 3.6% to 9 93.2/barrel, and are now trading at 9 94.6/barrel.

In addition, prices are supported by the lifting of quarantine restrictions on travel in many countries, which will increase demand for oil and fuel.

At the same time, higher prices lead to an increase in production and inventory in the United States. According to Barchart, from January 29 to February 4

• global crude oil reserves, which are stored on tankers for more than 7 years, increased by 35% to 108.29 million barrels,
• oil production in the United States increased by 0.9% to 11.6 million barrels/day, which is still 11.5% or 1.5 million barrels/day lower than the record figure of February 2020, when it reached 13.1 million barrels/day,
• the number of active oil rigs in the United States for February 4-11 increased by 19 units to a two – year high of 516 units, which indicates an active recovery in production.,
• U.S. crude oil inventories were up another 10.3%, while gasoline inventories were only 2.4% lower than the 5-year average.

Friday's data on the US economy turned out to be worse than the market expected, so stock indexes fell by 1.5-2.8%, which will soon increase pressure on oil prices. The University of Michigan Consumer Sentiment Index fell 5.5 p in February to an annual low of 61.7 P, with expectations of 67 P.

Experts expect that oil prices will cross the level of.100/barrel this week, but in the event of a decrease in tension with Russia and the withdrawal of troops, they will quickly fall below 9 90/barrel. However, the sale of oil and gas provides Russia with 45% of budget revenues, so it is interested in high prices, and analysts attribute the military escalation only to economic factors.