Oil commodity-related exchange traded funds maintained their momentum Thursday, with crude oil futures briefly trading above $100 per barrel for the first time since 2014, after Russia’s invasion of Ukraine threatened to disrupt supply.
On Thursday, the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, were up 0.2% and 1.8%, respectively, on Thursday. Meanwhile, WTI crude oil futures were 1.1% higher to $95.1 per barrel, and Brent crude futures rose 2.5% to $99.3 per barrel.
The Wall Street Journal reports that the most widely held Brent crude futures for delivery in May surged 7% to $101.64 per barrel earlier in the day.
Crude oil prices gained on fears of disruption as a result of a war between Russia and Ukraine. However, according to analysts, traders, and Western officials, there were no signs of an immediate interruption to the normal flow of oil, refined petro products, or natural gas to global markets.
Nevertheless, market watchers were bracing for the inevitable disruption to energy exports as strong sanctions on Russia’s financial system from the West could disrupt commodities trading or even trigger a retaliatory response from Moscow.
“They are a commodity superstore, and we are tight in all of these markets right now,” Helima Croft, global head of commodity strategy at RBC Capital Markets, told the WSJ. “Any indication that Russia is going to restrict oil exports will cause concern,” she added.
Even before Thursday’s rally, European refiners were looking for light-sweet crude due to a combination of rising regional demand, high natural gas prices, and tight crude supplies, Bloomberg reports.
“Voracious appetite from the refiners have propelled prices of light-sweet crudes in recent weeks despite stronger exports from Libya, the U.S., and West Africa this month,” Serena Huang, an analyst with oil intelligence firm Vortexa Ltd, told Bloomberg.
“The ramp-up of US refinery maintenance this month has increased the country’s light-sweet crude availabilities, with volumes to Europe projected to rise by around 120,000 month-on-month in February,” Huang added.