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Oil rockets to $113, gas hits record on Ukraine conflict

Oil prices soared Wednesday above $113 per barrel and natural gas spiked to a record peak, as investors fretted over key producer Russia’s intensifying assault on Ukraine.

European benchmark Brent North Sea oil struck $113.02 per barrel, the highest level since 2014, while New York-traded WTI hit a 2013 peak at $111.50.

Later Wednesday, traders will digest a meeting of OPEC and other major producers, including Russia, who will discuss whether to ramp up output to temper spiking prices that fan inflation.

President Joe Biden said that the United States would join a 30-country deal to release 60 million oil barrels to help temper the surge in crude prices, though analysts have warned such moves would have a limited impact.

“The war in Ukraine that Russia is waging with increasing severity is causing oil prices to skyrocket,” said Commerzbank analyst Carsten Fritsch.

Europe’s stock markets however rallied, despite earlier Asian losses, as energy majors won a shot in the arm from crude oil.

Added to the picture, Europe’s reference Dutch TTF gas price rocketed by around 50 percent to forge an all-time record 194.715 euros per megawatt hour.

UK gas prices jumped to 463.84 pence per therm, close to the record 470.83 pence attained in December.

– Energy ‘seriously rattled’ – “Energy markets are seriously rattled, with gas prices also spiking,” ThinkMarkets analyst Fawad Razaqzada told AFP.

“The big fear is the prospect of (a) Western import ban on Russian oil and gas — or retaliation from Russia in cutting its energy exports to Europe.”

Russia is one of the world’s biggest producers of natural gas and oil, and is a major exporter of other key commodities including aluminium.

The price of aluminium, used in a variety of items including drinks cans and aircraft components, hurtled to an all-time peak of $3,552 per tonne on Wednesday.

Ukraine and Russia are two of the world’s biggest producers of corn and wheat, which both soared to historic heights on Wednesday too.

Russian President Vladimir Putin’s invasion of its neighbour has sparked sharp swings across global markets over the past week, while Western sanctions prompted a dramatic collapse in the ruble.

– Rippling anxiety – Elsewhere, Asian equities sank with investors increasingly anxious about the Ukraine war’s knock-on impact on runaway inflation and the fragile economic recovery from Covid.

“Anxiety is again rippling through global financial markets… as the Ukraine conflict ratchets up inflationary pressures and threatens to derail global growth,” noted Hargreaves Lansdown analyst Susannah Streeter.

The crisis has seen numerous countries hammer Moscow with a series of wide-ranging sanctions that have isolated Russia and threaten to crash its economy.

But the main source of unease on trading floors is crude, which has rocketed since Russia began preparing to invade.

The conflict in eastern Europe comes with oil prices already elevated owing to tight supplies and a strong recovery in global demand as economies reopen from pandemic-induced lockdowns, fuelling inflation around the world.

Eurozone inflation soared in February to a new record high of 5.8 percent mainly on the back of surging energy prices, the EU’s official statistics agency Eurostat said Wednesday.

– The Economic Times

2 Comments on "Oil rockets to $113, gas hits record on Ukraine conflict"

  1. Theedrich on Thu, 3rd Mar 2022 8:40 am 

    In Of Men and Galaxies (University of Washington Press: Seattle, 1964, p. 62), British astrophysicist (and Plumian Professor of Astronomy and Experimental Philosophy at Cambridge University) Fred Hoyle, said

    I am going to make one big hypothesis — a religious hypothesis — that the emergence of intelligent life is not a meaningless accident.  But I am not going to follow orthodox religions by presuming that I know what the meaning is.  Intelligent life is such a remarkable phenomenon to emerge out of the basic physical laws that some connection seems implied, i.e., some correlation between laws and consequences of the laws — what in common terms we would call a plan.

    He continues (p. 64):

    [The] emergence of high intelligence as a more or less going concern demands an almost discontinuous uplift.  Millions of years of primitive conditions may precede the uplift, and millions may follow it, but the uplift itself must be made quickly, because of fuel exhaustion.

    At the end of his lectures, Hoyle says (p. 72):

    In my second lecture I pointed out the inevitability of such instruments as the eye and the brain.  Here I have argued that the most remarkable phase in the history of our species, that in which we are now living, the upsurge from a primitive Stone Age to a sophisticated culture and technology, is not just a chance affair.  Things must go this way.  We are following an inevitable path, one that must have been followed many, many times on other planets.

    As a species, homo sapiens is now at the point where fuel exhaustion is imminent.  The price of oil, for instance, is climbing too high for ordinary users at the same time that it is sinking too low for producers.  Governments, and especially the government of the United States, are doing their best to obscure, mask, and simultaneously deal with this reality.  Hence the mirages of windmills and solar panels as “solutions” to what is misleadingly called a “climate crisis.”  The fact is that the fossil fuel age, hitherto assumed to be “normal” and permanent, is ending.  And this means that the supremacy of the “indispensable nation” will also end.

    Hence the erratic behavior of the American political system and its elites.  Its traditional base, the European Whites who built the country, is now declining in numbers, morals, and will to live.  The rulership has decided to import millions of other people from underdeveloped countries to do the dirty work, take up the slack and fill the void, as though that could solve the problem, whereas it will only exacerbate it.  The regime is also inflating the currency, which declining societies always do in order to stave off the inevitable.

    And, of course, it has long been seeking to destroy Russia, its competitor in fossil fuel production and possessor of more abundant oil and gas resources.  The idea is to convert that nation into a subservient puppet which can provide Europe and America with oil and gas.  But if it goes too far and ruins Russia completely, it will also put an end to those fuel supplies to Europe, with devastating consequences for that area’s peoples.  The subterranean war the U.S. is waging psychologically and militarily against Russia via Ukraine is critical for its consequences in the global energy field.  And the longer this war lasts, the worse will be those consequences.

    As usual, the United States is choosing to do the wrong thing.

    But this time, that choice will be fatal.

  2. Cloggie on Fri, 4th Mar 2022 8:26 am 

    World made by foot:

    “One Offshore Turbine Powers All Dutch E-Bikes”

    17 million Dutch, 5 million e-bikes.
    Average e-bike distance: 43 km/week.
    Average e-bike price: 2283 euro.

    An e-bike and especially a 45 kmh speed-pedelec can replace more commuting (average 34 km/dag in the Netherlands)

    Dutch guy replaces his 20 minute car commute for a speed-e-bike for an entire month. Travel time 22 minutes.

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