HOUSTON: Oil climbed more than 1% on Thursday as Russia and Ukraine launched missiles at each other, an escalation of the war that fed supply worries despite a bigger-than-expected increase in US crude inventories.
Ukraine said Russia fired what appeared to be an intercontinental ballistic missile at the city of Dnipro on Thursday. If correct, this would be the first use in war of a weapon designed to deliver long-distance nuclear strikes. Ukraine fired US and British missiles at targets inside Russia this week despite warnings by Moscow that it would see such action as a major escalation.
Brent crude futures rose $1.02, or 1.4%, to $73.85 by 11:30 AM ET (1630 GMT). US West Texas Intermediate crude futures rallied $1.01, or 1.4%, to $69.76.
“While the current demand situation looks to be lacking, most traders are staying laser focused on the war escalations going on with Russia and Ukraine,” said Dennis Kissler, senior vice president of trading at BOK Financial.
Russia is the world’s second largest crude oil exporter after Saudi Arabia, so major disruptions could impact global supplies. “For oil, the risk is if Ukraine targets Russian energy infrastructure, while the other risk is uncertainty over how Russia responds to these attacks,” said ING analysts in a note.
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