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Oil Finding it Harder to Cross $100 Amid Mixed Readings on War

Published 02/25/2022, 03:49 PM
Updated 02/25/2022, 03:50 PM
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By Barani Krishnan

Investing.com -- Oil may have aced its long-awaited target to reach $100 a barrel but it seems to be having a hard time returning to the mark amid mixed readings on the war in Ukraine and its associated risks, including the ever-growing sanctions against Russian entities and individuals.

London-traded Brent, the global benchmark for oil, settled down $1.15, or 1.2%, at $97.93 a barrel on Friday. On Thursday, Brent reached $105.79, the first time it had gotten to $100 since 2014.

U.S. crude’s West Texas Intermediate, or WTI benchmark, settled down $1.22, or 1.3%, at $91.59. WTI hit a seven-year high of $100.54 in the previous session.

Despite the drop on the day, crude prices still registered weekly gains, with Brent up 4.3% and WTI rising 0.6%. Before last week, crude prices had gained non-stop for eight straight weeks.

Crude prices dropped on Friday after energy traders thought “the war in Ukraine probably won’t lead to any disruptions of Russian crude to Europe,” said Edward Moya, analyst at online trading platform OANDA. He also cited the potential for talks between Moscow and Ukraine officials.

While that may be true on the day, the potential for further escalation in the conflict remained as Russian forces made their move toward the Ukrainian capital Kyiv.  

“Taking over Kyiv would be followed by a strong reaction from Western leaders, which should suggest all sanctions remain on the table, including those on Russia crude oil and gas, added Moya. 

U.S. and EU officials also indicated on Friday that blocking Moscow from the international SWIFT payment system — considered the "mother of all” financial sanctions — remained an option.

The U.S. will sanction Russian President Vladimir Putin, the White House press secretary said on Friday, along with Foreign Minister Sergey Lavrov. The U.K. earlier announced it would sanction the two. 

 

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