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Futures Movers: Oil prices hit highest levels since 2008 as Ukraine war drives supply fears

Oil prices knocked out fresh multiyear highs on Thursday, as investors continued to scramble for the commodity amid fears of supply disruptions from a continuing war in Ukraine.

Price action

April West Texas Intermediate crude futures
CL.1,
+4.46%

% 
CLJ22,
+4.46%

climbed $5.42, or nearly 5%, to $115.93 a barrel, the highest since August 2008. On Wednesday, oil settled nearly 7% higher at $110.60 a barrel on the New York Mercantile Exchange. Front-month contract prices, which traded as high as $112.51, marked their highest finish since May 2011, according to Dow Jones Market Data.

May Brent crude
BRN00,
+5.02%

  
BRNK22,
+5.02%

 the global benchmark, surged $5.13, or 4.5%, to $118.04, the highest since February 2013. That follows Wednesday gain of 7.6% to $112.93 a barrel, the highest settlement since June 2014.

April natural gas
NGJ22,
+2.98%

rose 3.5% to $4.928 per million British thermal units.

April gasoline
RBJ22,
+5.49%

climbed 6% to $3.518 a gallon. April heating oil
RBJ22,
+5.49%

was up 6.4% to $3.52 a gallon.

Market drivers

A scramble for U.S. and Brent crude comes as global buyers have been shunning Russian oil, even at deeply discounted prices. That’s partly due to the fact cargoes sailing from Russia are finding it nearly impossible to get insurance, Nicolas Daher, lead energy analyst at the Economist Intelligence Unit told MarketWatch.

That’s amid a global backlash against the country for its invasion of Ukraine that began a week ago, with no letup in the fighting on Thursday.

Analysts said the decision by the International Energy Agency to release 60 million barrels from the emergency oil reserves of member countries, was also insufficient to balance the current demand, against the backdrop of the Ukraine war.

A decision by OPEC+ to continue its plan to gradually increase output on Wednesday also did little to calm investor nerves.

“One factor that can ease off the current oil price is Iranian oil. So far, it doesn’t seem likely that we will see a day when Iranian oil will hit the market, and the threat of sanctions on Russian oil remains a real possibility,” said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients.

One more shoe to drop could be sanctions on Russian, oil, which has yet to happen, and that’s something the market hasn’t priced in, said Aslam.

“If sanctions are imposed on Russian oil, a $150 b/d will be the most modest scenario. Under a coordinated action by the US and its allies, strategic oil reserve release isn’t going to help oil prices,” he said.

— Myra P. Saefong contributed to this article.

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