Brent crude topped USD 90/barrel for the first time since 2014 during trading on Wednesday, with the rally prompted by rising concerns that Russia could invade Ukraine – a scenario which could tighten supply further.
Oil prices continued to climb on Wednesday, with Brent and WTI closing 2% higher. Brent hit an intraday high of USD 90.47/barrel before easing slightly to settle at USD 89.96/barrel. WTI also hit its highest level since 2014, with the marker touching USD 87.95/barrel and later closing at USD 87.35/barrel.
Geopolitical tensions in both Eastern Europe and the Middle East have lifted the price of crude this week. Market participants fear that conflict in Ukraine could tighten supply further.
As for European gas, prices eased on Wednesday amid strong LNG imports and an uptick in wind power generation. However, further along the curve prices were rallying – pushed higher by rising geopolitical tensions between Russia and Ukraine.
The February-dated NBP and TTF contracts fell by 2.6% and 1.9% respectively on Wednesday, with the Dutch marker closing at the equivalent of USD 30.36/MMBtu – USD 0.74/MMBtu higher than the UK gas benchmark.
While gas prices fell, the European carbon price continued to climb, closing 1.4% higher at EUR 88.29/tonne.
Across the pond, US gas benchmark closed 5.5% higher at USD 4.28/MMBtu. Expectations of colder weather prompted the rally.
Mirroring the European gas benchmarks, Asian LNG marker JKM slipped on Wednesday, settling at USD 25.83/MMBtu.
Front-month futures and indexes at last close with day-on-day changes (click to enlarge):
Time references based on London GMT. Brent, WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights.
