Feb 25, 2022, 04:07pm
The price of oil broke above $100 per barrel for the first time in three years.
Oil prices are near seven-year highs after a two-month rally amid fears that the conflict between Russia and Ukraine will cause severe global supply disruptions.
As Russia launched its invasion of Ukraine on Thursday, the price of European benchmark Brent crude spiked to $105 per barrel, its highest level in over a year.
Goldman Sachs analysts predicted in a note on Friday that the price of oil could hit $125 per barrel by the summer.
With the conflict set to jeopardize global supplies, the price of crude could reach $130 per barrel by June, and that estimate could soar higher if additional disruptions occur.
If Russian oil and natural gas exports decline as a result of the conflict, it is predicted that the price ofBrent crude will average $115 per barrel during the second quarter of 2022, before falling back below $100 by the end of the year.
The United States and other Western allies have so far been reluctant to target Russia with tough energy sanctions because it is the world's second-largest oil producer and a major natural gas provider for Europe.
Simon Wong, research analyst at Gabelli Funds, says that it really does depend. Will there be a coordinated strategic release of reserves by the U.S. and IEA if Russian energy markets are targeted by the West?
The oil market is still very tight and will likely see wild swings as energy traders await the outcome of Russian and Iranian crude supplies, says Edward Moya, who thinks oil prices could rise to as much as $120 per barrel in the next few weeks.
A potential nuclear deal between the United States and Iran has caused traders to keep an eye on it. Iran is estimated to have 80 million barrels of crude oil in reserve, so if an agreement is reached, that could bring more oil back to global markets. According to analysts at JP Morgan, a decline in Russian energy exports due to the conflict with Ukraine could be offset by an Iran deal. In the second quarter, they expect the price of crude to be $110 per barrel, and by the end of the year it will be $90.
After Russia said it was open to talks with Ukraine, the stock market jumped 800 points.
The stock market briefly fell into a bear market.
The Federal Reserve is more important for stocks than the Russia-Ukraine Conflict.
Inflation and high oil prices could cause a stock plunge.
All Rights Reserved © 2024
