Oil Prices Steady Near 7-Year Highs on Concerns Over War in Ukraine

Oil prices were broadly stable Monday after rising by nearly 2% last week to seven-year highs, with concerns about tensions in Ukraine now at the top of traders’ minds.

Brent crude, the international benchmark, was stable at $94.40 a barrel with West Texas intermediate, the U.S. equivalent, up 0.1% to $93.20 a barrel.

With the U.S. ordering its diplomats to leave Kyiv, the Ukrainian capital, and some 130,000 Russian troops massed on three sides of Ukraine, indications from U.S. and U.K government sources that a Russian attack might be imminent have rattled markets the last several days.

Fears of an oil market disruption, which would have triggered a price hike in any case, are compounded by the current low inventories and supply disruption among producers, some of whom are unable to meet the production quotas agreed to by the Organization of the Petroleum Exporting Countries and its allies, most notably Russia.

J.P. Morgan analysts estimated last week that under an adverse scenario oil prices might even reach an all-time high of $150 barrel.

The only possible source of relief on oil market pressures could come from a successful outcome of the continuing U.S.-Iran talks on reviving the moribund 2015 nuclear deal. A deal might signal the end or phasing out of sanctions against Tehran, but there have been few signs of progress on that front so far.

Source : MarketWatch