Energy Markets Rally Sharply
February 23, 2022
The energy markets rallied sharply yesterday as the Russia/Ukraine situation escalated. The potential for a full-on invasion became a possibility and fear gripped the market and drive prices higher. As the day wore on the prices moderated and eased back. The Iran nuclear deal was again talked about being close to some conclusion, which was some news to temper that bullishness of the Russian advance into Ukraine.
With the news hot and heavy with the Russia/Ukraine situation the bullish talk and price targets are in the news. Trafigura’s Chief economist, Saad Rahim, said oil market strength could extend into 2023. It said $100 will serve as oil floor for some time. Vitol’s CEO, Russell Hardy, said oil price could be set for a “prolonged period” above $100 per barrel over the next six to nine months.
The UK and the US did issue sanctions against Russia. President Biden announced sanctions against Russia for what he called the begging of an invasion of Ukraine, the sanctions target Russian banks and sovereign debt but did not target Russian oil our natural as flows.
The news of these latest events will continue to be watched and impact where prices go here in the near term. Volatility will be high, and we all should stay on top of the changing markets for any contract quote, bids etc.